Cowen Positive On a Few Networking Leaders (CSCO, FFIV, JNPR)

Cowen & Co analyst John Marchetti is out today with new coverage on a handful of networking companies. Most of the companies he is rating a 'Neutral' or 'Underperform', which is probably well deserved, but Marchetti placed an Outperform rating on three notable names: Cisco Systems (Nasdaq: CSCO), F5 Networks (Nasdaq: FFIV) and Juniper Networks (Nasdaq: JNPR). Is Marchetti worth listening to in this horrible market?

Here is the case he is making on each:

Cisco Systems - Marchetti resumes coverage at Outperform, saying the company is best positioned to take share in a challenging market. He said in prior downturns, Cisco has used its product breadth and extensive channel presence to increase share and move into adjacent markets, a pattern he expect to be repeated over the next 12-18 months. Marchetti also notes Cisco has $26 billion in cash and strong free cash flow. He said the stock is trading at "trough levels."

F5 Networks - Marchetti initiates coverage at Outperform, saying the company is breaking away from the pack. He said F5's technology and market leadership coupled with moves into adjacent markets and new product launches will continue to win business and separate it from its peers. He sees 30%+ upside to shares relative to the market in 12 months.

Juniper Networks - Marchetti resumes coverage at Outperform, saying its focus on growth markets offers upside in a tough climate. He said the refreshed product portfolio is leveraged to service provider IP routing and the data center and security markets in the enterprise, some of the healthiest end markets in our group. Marchetti also said despite a weak spending environment in 2009, he see the secular drivers for long-term growth in Juniper's key markets as being intact.

The 'Neutral' or 'Underperform' rated stocks are: Neutral - Acme Packet (Nasdaq: APKT), Arris Group (Nasdaq: ARRS), Aruba Networks (Nasdaq: ARUN), Bigband Networks (Nasdaq: BBND), Ciena (Nasdaq: CIEN), Polycom (Nasdaq: PLCM), Riverbed Technology (Nasdaq: RVBD). Underperform - Nortel Networks (NYSE: NT).

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