Wells Fargo Reiterates Overweight Rating on Palo Alto Networks (PANW)
Wells Fargo analyst Andrew Nowinski reiterated an Overweight rating and $385.00 price target on Palo Alto Networks (NASDAQ: PANW).
The analyst comments "Product Revenue Could Miss: We are less optimistic as it relates to product revenue, which could be down on a Y/Y basis. The consensus estimate calls for $388MM in revenue, which is flat on a Y/Y basis, though we believe it could be closer to $380MM (down 1% Y/Y). Both FTNT (down 18% Y/Y) and CHKP (down 7% Y/Y) saw Y/Y declines in product revenue. There were also no resellers in our survey that called out strength in firewalls, as all were focused on the SASE and Cloud solutions. More Color on IBM Deal: Palo Alto announced a strategic partnership with IBM on May 15, where they acquired the SaaS assets for IBM QRadar. The intention is to migrate these customers over to XSIAM, though we have a number of questions regarding this deal. First, how much did they pay for this installed base of customers since it was not disclosed. Second, how confident is management that these customers will actually agree to migrate over without first doing a bake-off with other vendors?"
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Shares of Palo Alto Networks closed at $317.85 yesterday.