Palo Alto Networks (PANW) PT Lowered to $385 at Evercore ISI, Added To EVR ISI Tactical Underperform List

Evercore ISI analyst Peter Levine lowered the price target on Palo Alto Networks (NASDAQ: PANW) to $385.00 (from $405.00) while maintaining a Outperform rating.

The analyst said: "Ahead of the F3Q results, we conducted a quarterly survey involving 15 large partners. The data suggests that the ecosystem maintains a positive long-term outlook, with continued optimism regarding 12-month revenue growth acceleration. However, there was some moderation in Q/Q pipeline momentum, and PANW's "platformization" strategy received mixed reviews. We believe putting a Tactical U/P on PANW into their F3Q print is warranted as we are taking a somewhat more cautious stance. It's unclear to us how much visibility mgmt currently has, considering the complexity of all the moving parts. Investor confidence in meeting their billing targets hinges on a significant acceleration in the 2HFY25 and through FY26, which heavily depends on the success of this strategy. The data gathered from this quarter's survey and the commentary from our cyber summit (here) tell us CISO’s want best of breed. Our core thesis on the defensibility of cyber is not changing and our L/T view on PANW remaining the dominant the cyber vendor still holds, but thinking through the setup into the quarter, it’s appropriate to take a cautious view as no one really knows at this point what to expect. We would like to believe that mgmt took the necessary measures to de-risk numbers to mitigate the recurring theme of downward revisions. However, any additional noise will only exacerbate the situation. It's worth mentioning that sentiment has rebounded to a more neutral/slightly positive level since the sell-off following the F2Q report. However, we don't think there have been sufficient positive data points since Feb to justify this rebound."

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