By Michael Elkins
Evercore ISI upgraded JJuniper Networks (NYSE:JNPR) to an Outperform rating (from In Line) and raised their price target on the stock to $38.00 (from $34.00) as analysts believe that the company is well positioned to deliver better than expected results in both the near and long-term.
They wrote in a note, "We see upside to street expectations of ~16.7% EBIT margins in CY23 coming from a host of levers - easing commodity/expedited fees, lower freight/logistics, OPEX leverage, better mix (Software) & pricing.”
Analysts noted that JNPR’s current gross margins at 57% include ~300bps of headwind from supply chain inefficiencies that should normalize and unlock upside in CY23/24. In addition, They expect high single-digit (8%-10%) growth driven by enterprise ramps (Mist), cloud growth and backlog conversion.
“A combination of campus/cloud growth and op margin expansion should take Juniper EPS to $3.75 over the next five years.” analysts continued. “Campus networking will be the key growth driver as we expect Juniper share gains in the market to accelerate given the Mist technology leadership.”
Shares of JNPR are up 1.98% in pre-market trading on Thursday.