Deutsche Bank Upgrades Checkpoint Software (CHKP) to Buy

Deutsche Bank upgraded Checkpoint Software (NASDAQ: CHKP) from Hold to Buy with a price target of $90.00 (from $70.00).

Analyst Karl Keirstead said, "Our broader sector call is that enterprise spending on security IT will again be very strong in 2015, if not stronger than in 2014. Throughout 2014, we flagged PANW, FTNT and PFPT as our top security picks and we’re now adding CHKP to this short-list."

"CHKP shares trade at 18x our 2015E non-GAAP EPS and 11.7x FCF. We view these multiples as attractive given CHKP’s exposure to the fast-growing security segment and its accelerating growth profile (from 3%-4% range
throughout much of 2013 to 8% in 3Q14 to 11% if CHKP were to hit the high end of its 4Q14 guidance). While up 17% YTD (S&P 6.73%) , CHKP shares have lagged peers PANW (up 104%), FTNT (up 47%) and PFPT (up 40%) in 2014 and we believe that in the coming quarters, investors are likely to look more aggressively at CHKP shares as a cheaper way to play the security theme with more limited downside risk. The Street consensus estimate for ~7% revenue growth in 2015 looks very achievable and the stock doesn’t appear to reflect any material increase in buy-back activity in 2015," he added.

For an analyst ratings summary and ratings history on Checkpoint Software click here. For more ratings news on Checkpoint Software click here.

Shares of Checkpoint Software closed at $75.37 yesterday.

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