The Zacks Analyst Blog Highlights:Juniper Networks, AT&T, Cisco Systems, Alcatel-Lucent and Sun Bancorp

   The Zacks Analyst Blog Highlights:Juniper Networks, AT&T, Cisco Systems,
                        Alcatel-Lucent and Sun Bancorp

PR Newswire

CHICAGO, Jan. 3, 2013

CHICAGO, Jan. 3, 2013 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Juniper Networks Inc.
(NYSE:JNPR), AT&T Inc. (NYSE:T), Cisco Systems Inc. (Nasdaq:CSCO),
Alcatel-Lucent (NYSE:ALU) and Sun Bancorp Inc. (Nasdaq:SNBC).


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Here are highlights from Wednesday's Analyst Blog:

Juniper Networks: A Strong Buy

On January 1, 2013, Zacks Investment Research upgraded Juniper Networks Inc.
(NYSE:JNPR) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

A decent third quarter 2012, rising estimates, planned cost cutting,
acquisition of Contrail, and higher spending announced by its customer AT&T
Inc. (NYSE:T) are the rank drivers for this stock.

Juniper acquired software-based networking startup Contrail Systems for $176
million in cash in December 2012. Contrail Systems primarily develops software
to update and configure networking equipment instead of manually adjusting
networking hardware. The acquisition is expected to help Juniper to stand its
ground against stiff competition from rivals like Cisco Systems Inc.

Juniper posted adjusted earnings per share of 14 cents in the third quarter of
2012, above the Zacks Consensus Estimate of 10 cents. Year-over-year revenue
growth of 1.1% came on the back of Switching and Services sales, contribution
from Europe, as well as Service Providers, which were partially offset by
lower Security solutions sales, weak contribution from Enterprises and the
Asia-Pacific region.

During the quarter, Juniper announced its plans to reduce 500 positions, which
will save roughly $150.0 million in operating expenses annually.

We believe that with operating cost control and acquisition synergies, Juniper
will be able to outperform its peers.

For 2012, 9 out of 11 estimates were revised higher over the last 60 days. For
2013, 8 out of the 11 estimates moved upward.

Despite the positive estimate revisions, the Zacks Consensus Estimate for 2012
remained unchanged at 48 cents in the last 60 days. However, the Zacks
Consensus Estimate for 2013 went up by a penny to 85 cents in the last 60

Although the Zacks Consensus Estimate did not show much movement, we believe
that Juniper has the potential to post a positive earnings surprise in the
upcoming quarter. For the past four quarters, Juniper has posted an average
surprise of 21.1%.

Other Stocks to Consider

1. Cisco has a Zacks #2 Rank (Buy)

2. Alcatel-Lucent (NYSE:ALU) has a Zacks #3 Rank (Hold).

Sun Bancorp a Strong Buy

Upward estimate revisions on the back of strong third quarter results –
including an earnings surprise of 200.0% – have helped Sun Bancorp Inc.
(Nasdaq:SNBC) achieve a Zacks #1 Rank (Strong Buy) on January 1. With a solid
return of 37.2% in the last year, this provider of various commercial and
consumer banking services offers an attractive investment opportunity.

The Rank Drivers

Better-than-expected third quarter results, improving credit quality and
strong capital ratios are the primary rank drivers for this stock.

Sun Bancorp reported its third quarter results on October 24 with earnings per
share of 1 cent, beating the Zacks Consensus Estimate loss of 1 cent by
200.0%, but lagged the year-ago earnings of 3 cents by 66.7%. Higher
non-interest income and reduced provision for loan losses were the positives
for the quarter.

Non-interest income jumped 65.5% year over year to $9.6 million. Provision for
loan losses skidded 17.4% from the year-ago quarter to $1.9 million.

Non-interest expenses, which increased 14.4% on a year-over year basis to
$30.9 million and net interest income, that descended 7.3% year over year to
$24.3 million, were the dampeners for the quarter. Moreover, net interest
margin contracted 20 basis points year over year to 3.41%, mainly due to
persistent pressure in the current interest rate environment.

Credit quality continued to exhibit improvement. The allowance for loan losses
was 2.12% of gross loans as of September 30, 2012, compared with 2.39% of
total loans as of September 30, 2011. Non-performing assets for the quarter
were $126.4 million, dipping 10.2% from the prior-year period. Net charge-offs
were $4.2 million, down 27.6% year over year.

As of September 30, 2012, Sun Bancorp's total risk-based capital ratio was
14.30%, Tier 1 capital ratio was 12.73% and leverage capital ratio was 10.43%,
above the "well-capitalized" regulatory requirements of 10.00%, 6.00% and
5.00%, respectively.

Earnings Estimate Revisions

Over the past 60 days, upward revisions of 3 out of 5 estimates pushed the
Zacks Consensus Estimate for 2012 up from loss of 32 cents to 31 cents per
share. The Zacks Consensus Estimate for 2013 advanced 50.0% to 3 cents.


On a price-to-book basis, the shares of Sun Bancorp are trading at 1.0x, a
23.0% discount to the peer group average of 1.3x. Given the company's strong
fundamentals, the valuation looks reasonable.

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