Palo Alto Networks 'Well Positioned' to Prevent Known and Unknown Threats, Barclays Says

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Along with the broader market, shares of
Palo Alto NetworksPANW
have given back earlier gains, only up 1.7 percent to $65.50 after being higher by four percent earlier in Monday's trading. The shares were upgraded from Equalweight to Overweight by Barclays, which gave the shares an extra boost. Analyst Raimo Lenschow maintained a $78 price target. Lenschow's upgrade is based on three factors:
  • ”Underlying trends in the market appear to be improving, evidenced by Barclay's most recent CIO survey, in which security was seen as the top driver of IT spending in 2014.”
  • ”The recent pullback in high-multiple names has created a more compelling entry point.”
  • ”Overhang from the litigation with Juniper appears to be dissipating with investors once again refocusing on the fundamental strength of the business model.”
The analyst believes Palo Alto is “well positioned” to prevent both known and unknown threats, which will bode well going forward “as the threat landscape continues to evolve towards more complex threats.” “Palo Alto's expansion in the datacenter and improving subscription attach rates provide a clear path for margin expansion and accelerating free cash flow, a dynamic which is not often found in comparable growth companies,” according to Lenschow.
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Posted In: Analyst ColorAnalyst RatingsBarclaysRaimo Lenschow
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