Juniper: RBC Capital Cuts Rating; Cites Slowing Demand

RBC Capital analyst Mark Sue this morning cut his rating on Juniper Networks to Sector Perform from Outperform.

“Long-term investors in Juniper may see steady earnings growth driven by new product innovation,” Sue writes in a research note. “Near-term, however, we believe Juniper is facing a back-end loaded quarter and slowing demand for some of its switches and security products and we’re flattening our sequential growth estimate for the September quarter.”

For calendar 2011, he now sees revenue of $4.69 billion, below the consensus at $4.86 billion, with profits of $1.45 a share, below the Street at $1.53. For 2012, he sees $1.70, below the Street at $1.89.

While Sue says an “arsenal of new products” could “reignite” top line growth, he says most of the new stuff comes with long cycles and won’t likely contribute meaningfully to revenue until the 2012 first half.

Despite the downgrade, Juniper this morning is up 4 cents, at $29.95.