UBS Cuts Price Target on Palo Alto Networks (PANW) to $160 Following 1Q
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UBS maintained a Buy rating on Palo Alto Networks (NYSE: PANW), and cut the price target to $160.00 (from $165.00), following the company's 1Q earnings report. PANW reported product revenue of $164M, below the Street's $167M estimate.
Analyst Brent Thill commented, "On the heels of a tough set-up with shares having moved 20%+ into the print, weak product, a first-ever billings miss, and below consensus guide are likely to keep the stock sideways in the short-term. The 2nd set of disappointing results from PANW in the last 3Qs, we think this is likely to raise fears of deeper-seated issues (in spite broader industry, peers witnessing similar product growth decel, sales elongation, and slipped deal dynamics) and heighten skepticism on the implied back-end loaded growth. Valuation after-hours is pointing to 6x NTM EV/S and 15x NTM EV/FCF on lowered UBSe, where we see downside at ~$115 assuming trough multiples of 4x NTM EV/S / 12x NTM EV/FCF with upside to our $160 price target assuming 7x NTM EV/S and 18x NTM EV/FCF if PANW can successfully shore up execution out of F2Q."
Shares of Palo Alto Networks closed at $161.06 yesterday.
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