Pacific Crest Upgrades Fortinet (FTNT) to Overweight
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Pacific Crest upgraded Fortinet (NASDAQ: FTNT) from Sector Weight to Overweight with a price target of $47. Analyst Rob Owens thinks focus on enhanced profitability and other factors will drive outperformance in shares.
"A shift in focus to increasing profitability, a unified platform solution coming of age at the right time, and a go-to-market strategy that accentuates the company's comparative advantage leave us increasingly confident on Fortinet's ability to benefit from market dynamics," said Owens.
"Marking a shift from the 'growth with improving profitability' messaging, Fortinet committed to improving its profitability profile with meaningful expense rationalization on sales force and product investments. We expect the heightened focus on operating efficiency to be well-received by a market prone to reward profitability and see the potential for further margin upside as we progress through 2017," continued the analyst.
Owens added, "Fortinet continues to shift its go-to-market investment from the large enterprise market to the SMB high-end subset. Given the highly competitive nature of the large enterprise market, we see a reduced focus on the enterprise as well-aligned with the economics of the model."
Shares of Fortinet closed at $35.67 yesterday.
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