Alcatel Gains Squeeze Juniper

Juniper's (JNPR Quote) fan base keeps shrinking as growth opportunities seem to slip away.

Banc of America analyst Tim Long downgraded the stock Wednesday to neutral from buy. Long says the networker's failure to gain market share in its routing business and its "choppy" sales of network security products could make for weaker-than-expected sales this year.

Though the Sunnyvale, Calif., Internet equipment supplier has long been a Wall Street favorite for its strong No. 2 position in router sales behind Cisco (CSCO Quote), 2006 has been a tough year. The stock has dropped 14% amid management turmoil and increasing success by rival Alcatel (ALA Quote) on Juniper's turf.

Juniper appears particularly vulnerable in the emerging Internet video market, says Long. The company's routers -- boxes that direct Internet traffic -- are "weak" in gigabit Ethernet capacity, he says. Meanwhile, Juniper's "lack of video expertise" will make it hard to offer gear supporting the "triple play" -- phone, Net and TV -- that phone and cable companies are shopping for. ...