Fortinet, Cleveland-Cliffs Trending as Analysts Shift Views

Analysts are intrested in these 5 stocks: ( (FTNT) ) and ( (CLF) ). Here is a breakdown of their recent ratings and the rationale behind them.

Fortinet is drawing fresh attention from Wall Street, with analyst Shaul Eyal upgrading the cybersecurity specialist to a Buy rating while keeping a $100 price target. His call comes despite what he describes as “lukewarm at best” sentiment toward software stocks and ongoing investor worries about soft channel checks, rising memory prices, and questions over Fortinet’s status as a true platform provider. Eyal argues that the outlook “isn’t that bleak,” pointing to solid demand trends and a valuation he sees as attractive at under 7x enterprise value to projected 2027 revenue, especially if Fortinet can sustain low- to mid-teens growth in 2026.

The key to the bullish case is evidence from the field that Fortinet’s business appears more stable than feared as 2026 unfolds. Eyal’s checks suggest upside risk to the company’s fourth-quarter 2025 billings and revenue, where he currently models year‑over‑year growth of 11.6% and 13.3%, respectively. He believes demand is being supported by strong performance across Fortinet’s secure networking, unified SASE (secure access service edge), and security operations offerings. Importantly for investors, he thinks this strength could push his 2026 billings estimate above the current 11.6% growth assumption if customer spending stays steady.

Geographically, Fortinet’s growth story appears broad-based, which may reassure investors worried about regional weakness. Eyal highlights particularly strong traction in Europe, the Middle East and Africa (EMEA), which accounts for roughly 40% of the business, and in Latin America, which along with stable North America represents about 41% combined. Asia-Pacific (APAC) contributes around 19% and is also seeing healthy uptake. Meanwhile, Fortinet’s go‑to‑market efforts in North America are described as stabilizing, and competitive dynamics versus Palo Alto Networks and Check Point are said to resemble earlier periods that the company successfully navigated.

On the cost side, the analyst pushes back against one of the central bear arguments: that rising memory prices could undercut Fortinet’s proprietary ASIC-based strategy and compress margins. Eyal considers these concerns overdone, noting that Fortinet’s custom chips are designed to deliver a lower total cost of ownership than rival offerings, which supports pricing power. His checks suggest Fortinet has already been able to raise some product prices by about 20%, depending on the line, helping offset higher component costs. He still models a very strong gross margin profile, with a slight dip from 81.6% in the third quarter to 80.7% in the fourth quarter of 2025.

Looking into 2026, Eyal expects Fortinet to finish 2025 with an annual gross margin of roughly 81.4% and to maintain similar levels in the following year, signaling that profitability should remain robust even as the company invests in growth. He also pushes back on the narrative that artificial intelligence might “eat” traditional security software, instead arguing that AI is likely to augment Fortinet’s offerings rather than replace them. For investors, the combination of resilient margins, steady double‑digit growth potential, and a sub‑7x revenue multiple underpins the upgraded Buy rating and suggests that sentiment, rather than fundamentals, may be the main thing holding the stock back.

Cleveland-Cliffs, by contrast, is moving in the opposite direction on analyst scorecards, with Seaport Research Partners’ Martin Englert downgrading the steelmaker’s shares to Neutral from Buy as the company heads into 2026 from a stronger base. Englert acknowledges that fundamentals have improved markedly versus a year ago, thanks to better market conditions and management’s work to enhance the operating model. He expects this progress to be highlighted on the company’s February 9, 2026 earnings call, likely with a constructive tone on the outlook. However, he argues that the stock price has already run ahead of his expectations, surpassing his $13 price target and, in his view, beginning to reflect more “normalized” earnings power of about $150 per ton at roughly a 6x multiple.

The downgrade does not signal a bearish stance; rather, it reflects Englert’s judgment that the current valuation adequately reflects the base case. He points out that Cleveland-Cliffs’ balance sheet is on a healthier footing, which could support a longer-term deleveraging story that might ultimately prove his downgrade premature if the share price continues to rise. At the same time, he cautions that investors need to weigh potential upside drivers, such as better-than-expected steel demand or further operational improvements, against risks that could cap near-term gains or introduce volatility after a strong run.

One of the more intriguing potential catalysts is a pending partnership with South Korean steelmaker POSCO. Englert believes such a deal could help Cleveland-Cliffs accelerate debt reduction while also bringing volume benefits and lowering unit fixed costs, making the company more efficient and competitive. If a formal announcement is not made before the February 9 earnings release, he still expects management to provide a qualitative update on the status of discussions. He also notes that an eventual POSCO deal is likely to be viewed positively by the market at first, possibly giving the shares another leg higher.

Yet the POSCO angle is a double-edged sword from a trading standpoint. Englert suspects expectations for a partnership are already supporting the current valuation, which means that once a deal is finally unveiled, some investors who were waiting on the sidelines could move in with short positions, betting on a “sell the news” reaction. Depending on the structure and economics of any agreement, Cleveland-Cliffs might also consider an equity raise after the stock’s recent strength, especially if its pro‑forma leverage post‑deal suggests the market would accept additional issuance. That possibility adds another factor for shareholders to watch as they assess dilution risk versus balance sheet benefits.

Beyond company-specific developments, the broader steel cycle looms large in Englert’s Neutral stance. While he describes the current cycle as positive with ongoing momentum, he warns that any sign of a negative inflection—whether in pricing or demand—could quickly pressure steel equities, including Cleveland-Cliffs. Conversely, if the cyclical recovery proves stronger and more durable than anticipated, with prices and demand surprising to the upside, the shares could still climb further despite the downgrade. For investors, the message is that Cleveland-Cliffs is entering 2026 from a position of improved strength, but that much of this progress is already reflected in the stock, leaving a more balanced mix of upside and downside risks in the months ahead.