UPDATE 1-RESEARCH ALERT-FBR sees growth in IP equipment market
April 4th, 2008 | by admin |(Changes source, adds details)
April 4 (Reuters) - Friedman Billings Ramsey initiatedcoverage of network equipment makers Cisco Systems Inc (CSCO.O: Quote, Profile, Research)and Juniper Networks Inc (JNPR.O: Quote, Profile, Research) and said the networkingequipment market will continue to grow faster than otherenterprise IT markets.
Friedman said it expects the growth in Web-based consumerapplications to result in significantly more data trafficrunning over enterprise and carrier networks, driving demandfor IP (Internet protocol) infrastructure equipment, such asrouters and switches.
For 2008, Friedman expects worldwide enterprise networkequipment spending growth of 8 percent to 9 percent on demandfor IP voice and video, LAN (local area network) switching, andwireless LAN spending.
The brokerage said it sees the greatest opportunity for IPdata equipment vendors such as Cisco, Juniper, Alcatel-Lucent(ALUA.PA: Quote, Profile, Research), Huawei [HWT.UL], and F5 Networks (FFIV.O: Quote, Profile, Research).
Access network equipment vendors, such as ADCTelecommunications Inc (ADCT.O: Quote, Profile, Research), Adtran Inc (ADTN.O: Quote, Profile, Research), ArrisGroup Inc (ARRS.O: Quote, Profile, Research), Harmonic Inc (HLIT.O: Quote, Profile, Research), Tellabs Inc(TLAB.O: Quote, Profile, Research), and Sonus Networks Inc (SONS.O: Quote, Profile, Research), are indirectbeneficiaries given their service provider focus, it added.
The brokerage started Cisco with “outperform” rating and a$31 price target, saying the company was best positioned totake advantage of positive demand trends for IP networkequipment.
The brokerage started Juniper with “market perform” ratingand a $27 price target. It said the rating reflects the premiumvaluation of the stock and additional risk to the share pricefrom any negative news regarding the company’s growth forecast.
Shares of Cisco closed at $24.23 Thursday, while Junipershares closed at $24.38 on Nasdaq. (Reporting by Jennifer Robin Raj in Bangalore; Editing by AnilD’Silva)
