Morgan Stanley analyst Keith Weiss downgraded Fortinet (NASDAQ: FTNT) from Overweight to Equalweight with a price target of $78.00 (from $110.00).

The analyst comments: "There has been a meaningful reset of expectations for the Fortinet firewall refresh, which causes us to revise our expectations down. Additionally, given lowered confidence in the management team for now, multiple to remain constrained. Our base case PT moves to $78, from $110, or 22x EV/26e FCF (from 29x). Growth adjusted multiple is a 20% discount to growth adjusted FCF multiples for security software to account for penalty box company will operate in for next few quarters. Our bull case moves to $110, from $145, and is 29x EV/26e FCF (from 36x), to account for name trading more in-line with growth adjusted software. Our bear case moves to $49, from $67, or 15x EV/26e FCF, reflecting a case in which company goes ex-growth in 2026 on tough comp from refresh cycle. Risks to our PT include macro, firewall refresh delays, and weaker attach of new products."

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Shares of Fortinet closed at $96.57 yesterday.