Palo Alto Networks (PANW) shares closed meaningfully higher on Wednesday after Stifel said the cybersecurity giant was strongly positioned to gain further as the year unfolds.
In a research note this morning, analyst Adam Borg reiterated his “Buy” rating on PANW and lifted his price target to $275, indicating potential upside of another 12% from current levels.
Investors cheered the bullish note, particularly because Palo Alto Networks stock has already rallied 65% since late March.
Stifel’s Bull View on Palo Alto Networks Stock
Borg’s bullish call follows extensive end-of-quarter channel checks with five “Tier-1” value-added resellers (VARs) and system integrators (SIs) representing a massive $2 billion plus in combined annual spending on Palo Alto products.
“As it relates to the company’s Q3 results, three partners were above expectations — including two that were well above — and two partners were in line,” the Stifel analyst noted in his latest report.
According to him, these checks, alongside solid structural prints from industry peers like Fortinet, suggest Palo Alto will deliver at least in-line results and walk up its full-year guidance.
Note that PANW shares currently sit firmly above its key moving averages (MAs), with a relative strength index (RSI) in the early 80s indicating strong buying pressure.
PANW Is Cheaper to Own Than Cybersecurity Peers
In his research note, Adam Borg also noted that partners across the board are bullish on PANW’s “platform opportunity, its CyberArk acquisition, and its artificial intelligence (AI) positioning."
Additionally, the Stifel analyst finds Palo Alto Networks shares attractively priced at about 22x sales, compared to its cybersecurity peers, including CrowdStrike (CRWD), which is going for 33x currently.
Investors should also note that PANW has a history of closing both June and July handily in green, a seasonal pattern that further improves its appeal for the near term.
Plus, CEO Nikesh Arora loaded up on company shares in late March, which strengthens the overall bull case heading into its quarterly release on June 2.
What’s the Consensus Rating on Palo Alto Networks?
Other Wall Street analysts seem to agree with Stifel’s constructive view on Palo Alto Networks.
The consensus rating on PANW stock sits at “Strong Buy,” indicating broad institutional conviction that it’s not out of juice just yet.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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