On January 13, UBS reduced its price target for Palo Alto Networks Inc. (NASDAQ:PANW) from $220 to $215, keeping a Neutral rating on the stock, according to a report by The Fly.
The firm expressed a constructive view on the cybersecurity sector overall, estimating that spending in this industry will outpace growth in general IT budgets. It anticipates further improvements through consolidation and increased commercialization of AI-enabled solutions.
However, UBS noted that stock selection remains challenging in the current environment. It favors mid-cap security platform stocks that are in the early stages of their product ecosystems and growth.
Data from TipRanks shows UBS has maintained a cautious stance on Palo Alto Networks for an extended period. In its last update in November, the firm cited softness in platformization deals and a potential slowdown in service revenue growth as reasons for its cautious outlook.
Earlier in the first week of January, Guggenheim upgraded Palo Alto Networks to Neutral from Sell, pointing to the stock's underperformance over the past year. The firm also highlighted the company's recent acquisitions as a factor, stating these strategic deals could strengthen its competitive position and support a more positive outlook.
Palo Alto Networks provides security solutions for enterprise users, networks, clouds, and endpoints through platforms including Prisma Access, Prisma Cloud, and Cortex.