Security Provider Palo Alto Shares Roar on Upgrades

Palo Alto Networks saw its shares rise over 2% on Thursday after being upgraded by Wedbush.

The company’s stock was upgraded to “outperform” from “neutral”, with the firm citing a strong upgrade cycle for Palo Alto’s key firewall product.

Analysts Daniel Ives and Strecker Backe of the firm noted, “We strongly believe for PANW that numbers for FY19/FY20 look conservative and the Street is still underestimating the magnitude of this existing firewall refresh for the company as a major tailwind over the next few years.”

The firm also raised its price target on shares from $225 to $265.

According to Ives and Backe, conversations with customers, partners, and field checks, have given them “incremental confidence” in the company’s growth story over the next 12 to 18 months.

It was earlier in the week that UBS and BMO Capital also raised their ratings on the stock.

“While we have looked to the firewall business for earnings support in the near- to- mid-term, we have also called out that we value Palo Alto for CEO Nikesh Arora’s intense focus on winning the cloud security space,” wrote Cramer and his team.

It was last Novemeber that Jim Cramer wrote, “It doesn’t take a genius to figure out that the need here is on the rise. Remember the Equifax hack? Or the WannaCry that struck last year? I’ve had two hacks on my credit cards, two, in the last 18 months. These are the examples illustrating the absolute necessity for companies to invest in software security.”

“FireEye niche, very good at what it does. CyberArk, very good at what it does. Fortinet, very good at what it does. But, Palo Alto does it all.”

Disclaimer: We have no position in Palo Alto Networks Inc. (NYSE: PANW) and have not been compensated for this article.