Morgan Stanley Downgrades Fortinet Inc to Equal-Weight

Fortinet Inc. (NASDAQ: FTNT) was downgraded by Morgan Stanley on Monday from Overweight to Equal-Weight while the Price Target of $29 was maintained.

 

The report from analysts Keith Weiss and Melissa Goram projected that sustained billings growth will be challenging in FY 2015.

 

According to Weiss, “Fortinet has ramped up investments in sales and marketing and R&D over the past several quarters to drive better top-line growth...these investments have beared fruit, with billings growth accelerating to 30 percent YoY in 1H. However, despite better growth, sales productivity continues to trend lower with product billings per $ of S&M spend down over the past six quarters.”

 

The report indicated that while Weiss is keeping the Price Target at $29 we see other names in our universe with more absolute upside, such as” salesforce.com, inc. (NYSE: CRM), Palo Alto Networks Inc. (NYSE: PANW), Splunk Inc. (NASDAQ: SPLK) and Tableau Software Inc. (NYSE: DATA).

 

Fortinet traded at $24.97 in the pre-market on Monday, down 2.27 percent.