Juniper (JNPR) Stock Jumps 21.8%: Will It Continue to Soar?

Juniper Networks (JNPR) shares rallied 21.8% in the last trading session to close at $36.81. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.9% gain over the past four weeks.

Juniper has inked an agreement with Hewlett Packard Enterprise, under which the latter will acquire the former in an all-stock deal of $40.00 per share valued at approximately $14 billion. The merger accentuates Hewlett Packard’s portfolio mix shift toward higher-growth solutions and strengthens its high-margin networking business. The transaction is expected to be accretive to non-GAAP earnings and free cash flow from the first year.

The combined entity will offer a comprehensive portfolio to better serve user demand for secure, unified technology solutions that focuses on edge-to-cloud strategy. Together, Hewlett Packard and Juniper will provide customers the networking architecture necessary to manage and simplify their expanding and increasingly complex connectivity needs. The transaction represents an important inflection point in the industry and will likely change the dynamics in the networking market.

This computer network equipment maker is expected to post quarterly earnings of $0.64 per share in its upcoming report, which represents a year-over-year change of -1.5%. Revenues are expected to be $1.41 billion, down 2.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Juniper, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on JNPR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Juniper belongs to the Zacks Wireless Equipment industry. Another stock from the same industry, Nokia (NOK), closed the last trading session 1.7% lower at $3.48. Over the past month, NOK has returned 13.5%.

Nokia's consensus EPS estimate for the upcoming report has changed -7.7% over the past month to $0.14. Compared to the company's year-ago EPS, this represents a change of -12.5%. Nokia currently boasts a Zacks Rank of #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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