Palo Alto Networks (PANW) PT Raised to $135 at Guggenheim

Guggenheim analyst John DiFucci raised the price target on Palo Alto Networks (NASDAQ: PANW) to $135.00 (from $130.00) while maintaining a Sell rating.

The analyst comments "PANW reported F4Q25 results that were largely in line with consensus to a little better, though RPO was much better; F3Q guidance mostly exceeded consensus with NGS ARR about in line; and FY26 guidance was better than consensus estimates. F4Q RPO was strong on the back of very large deals, but management said duration increased both y/y and q/q. While we appreciate management’s statement that duration stayed in the range of 3 years, an assessment of RPO is very different if duration was 2.5 versus 3.4 years. Frankly, it’s very different if it’s 3.1 years versus 3.3 years. In other words, we believe using RPO alone to assess business momentum is worthless or worse (see our report “What RPO Tells You … And What it Doesn’t”). That’s why we estimate New ARR for the entire company (not just the faster growing products in NGS), which was flattish the last two Qs after 6 consecutive Qs of decline. Regardless, we believe the positive stock reaction was not about F4Q, but about the guidance, which was better than expected and implies New ARR finally starts to grow – it should given the easy comps, in our view. We believe that PANW, like many security stocks, has enjoyed investors’ high level strategic view that the risks associated with AI will make security more relevant. Finally, an AI beneficiary! And PANW is the biggest liquid pure-play, so it’s an easy way to play this theme, in our view. We don’t disagree with that assessment, but Security has been the worst operationally performing subsegment of software for most of the last two years, as measured by New ARR growth (see Exhibit 1). In fairness, some areas of security (Identity and Data security) have performed very well over that period. Taking this all into account, we recognize the significant value that PANW has built over the years, but we believe that value is less than reflected in the current stock price. We remain Sell, though we are raising our price target to $135 from $130 due to our higher forecasts."

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