By Senad Karaahmetovic
Bank of America analyst Tai Liani downgraded 3 Networking and Security stocks today as she believes the current investor expectations remain too high, despite the recent selloff.
Shares of Juniper Networks (NYSE:JNPR) and Arista Networks (NYSE:ANET) are double downgraded to Underperform from Buy, while F5 Networks (NASDAQ:FFIV) is cut to Neutral from Buy.
"At a high level, we flag risks of deteriorating order trends, especially given tough comps against last year’s strength, as well as concerns about slow spending and project pushouts even in areas deemed safe. We see tightened risks over the next two to three quarters and make the following adjustments to our ratings," Liani told clients in a note.
Despite the double downgrade, Liani remains a fan of ANET in the long run. However, she sees “the highest levels of expectations mismatch,” hence the price target is cut to $105 from $140.
Similarly, JNPR and FFIV are cut "on expectations of decelerating order growth and supply chain challenges."
On the other hand, the analyst double upgraded Check Point Software (NASDAQ:CHKP) to Buy from Underperform as it provides investors "with the highest levels of visibility and stability over the next few quarters."
As a result, CHPK shares are up about 1.5% today while JNPR and ANET stocks are down 3.8% and 3%, respectively.