UPDATE: Bank of America Upgrades Fortinet to Buy, Reiterates $24 PT on More Favorable Risk/Reward

In a report published Tuesday, Bank of America analyst Tal Liani upgraded the rating on Fortinet FTNT from Neutral to Buy, and reiterated the $24.00 price target. In the report, Bank of America noted, “We upgrade our rating on Fortinet from Neutral to Buy and maintain our PO at $24. Our forward estimates are unchanged. The stock has been under pressure (down 17% from the 200 day moving-average) since the abrupt announcement on 11/22/2013 of the departure of COO/CFO Ahmed Rubaie. We believe investors' concerns are legitimate, especially given Mr. Rubaie's short tenure and the fact that the last CFO transition led to execution issues in 1H13 Fortinet is still recovering from. While we acknowledge potential risks as Fortinet navigates yet again through a CFO transition, we believe the risk/reward profile is compelling, with the stock trading at 2.8x EV/2015E Sales, a steep 35% discount to the 4.3x multiple accorded to enterprise security peer group.” Fortinet closed on Monday at $16.75.