NEW YORK, USA: Network equipment maker Juniper Networks Inc is set to outline next week how it plans to compete against much-bigger rival Cisco Systems Inc and win over Wall Street.

Juniper shares have gained little in recent months, despite stronger-than-expected results and outlook for two quarters straight, as investors worried about slow spending by telephone service providers, the company's main customer base. Analysts have also been concerned about competition with Cisco and its newly acquired wireless technology firm, Starent Networks.

While a majority of analysts have a "hold" or neutral rating on Juniper shares, some said their assessment was gradually turning positive and that Juniper's analyst meeting on Tuesday could mark a turning point.

A near 6 percent increase in its shares on Friday could be just the beginning of longer-term growth, they said.

Pacific Crest analyst Brent Bracelin rates the stock at "outperform" with a 12-month price target of $34, compared with Friday's close of $27.44.

"We're still in the early stages of a recovery cycle. Enterprise is only two quarters into a recovery. The service provider recovery hasn't fully started yet. So it's too early to take profits," said Bracelin.

Many were more cautious, pointing out the shares are already trading over 22 times forecast 2010 earnings estimates, above Cisco's multiple of around 16.

Wireless Strategy, Partnerships

One reason for increased optimism is Juniper's announcement earlier this month it will begin selling new wireless products to mobile carriers. Analysts said the move showed Juniper was prepared to compete against Cisco-Starent.

Wireless networking is a key area of growth as carriers such as AT&T Inc update their networks to support Internet traffic from increasingly popular smartphones.

Juniper's results last quarter showed a spike in sales to AT&T and analysts said they would listen for any comments on whether there was more to come as carriers upgrade to next generation, 3G and 4G networks.

"Probably one of the biggest opportunities right now is carrier spending on wireless networks," said Erik Suppiger, an analyst at Signal Hill, adding that his view was slightly more optimistic than what his "hold" rating might suggest.

"Spending on 3G and 4G, if they materialise, that will be a big driver. But we have to see exactly how that evolves," he said.

Analysts also said they were looking for more details on Juniper's strategy of expanding sales to business customers through partnerships.

While Juniper derives a majority of its revenue from service providers, it has begun selling switches and other gear to corporate customers as a way to diversify its business and benefit from demand for advanced, data centre networks.

A key part of that expansion has been to form resale partnerships with companies such as Hewlett-Packard Co and International Business Machines Corp.

By reselling equipment through such large vendors, Juniper can broaden its sales reach and compete more effectively against Cisco, which has nearly 10 times the number of employees.

Cisco, in the meantime, has been expanding into new business areas, including software and servers, a move that has found it competing directly against former partners such as HP and IBM. Cisco said on Thursday that it was unlikely to renew its resale partnership with HP.