Lazard Freres Slashes Juniper Outlook

Analyst Truc Do thinks market conditions will limit the networking solution company's near-term growth potential

Lazard Freres downgraded Juniper Networks (JNPR ) to hold from buy.

Analyst Truc Do notes the company's preannouncement indicates that carriers continue to be cautious on spending in the June quarter. On Friday Juniper forecast $0.08-$0.09 Q2 EPS (pro forma). Do says although he continues to view Juniper as the technology leader in the IP router market, he believes current market conditions will limit Juniper's growth prospects in the near-term.

Despite recent declines, at 54 times Do's 2002 EPS estimate, shares still appear expensive. He cut the $1.35 billion 2001 revenue estimate to $1.0 billion, and cut the $1.00 EPS estimate to $0.52. He also cut the $2.2 billion 2002 revenue estimate to $1.3 billion, and trimmed the $1.20 2002 EPS estimate to $0.70. Finally, Do cut the $60 12-month target to $35.

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