In a report released today, Keith Weiss from Morgan Stanley maintained a Buy rating on Palo Alto Networks, with a price target of $205.00.
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Keith Weiss has given his Buy rating due to a combination of factors that highlight the strategic benefits of Palo Alto Networks’ recent acquisition of CyberArk. The acquisition, valued at approximately $25 billion, is seen as a transformational move that aligns with Palo Alto Networks’ ongoing ‘platformization’ strategy. This strategy is expected to enhance the company’s long-term growth trajectory, particularly in the realm of identity security, which is becoming increasingly critical in the cybersecurity landscape.
Moreover, Palo Alto Networks has demonstrated strong free cash flow growth, maintaining high margins in recent years, and has set a solid foundation for future financial performance. The deal is projected to be immediately accretive to revenue growth and gross margins, with free cash flow per share accretion anticipated by 2028. The pro forma model suggests that achieving the necessary synergies for this accretion is feasible, reinforcing the positive outlook for the combined entity. These factors collectively underpin Weiss’s confidence in the stock’s potential, leading to the Buy rating.
In another report released yesterday, Bernstein also maintained a Buy rating on the stock with a $204.00 price target.