Palo Alto Networks (PANW) PT Raised to $600 at Stifel

Stifel analyst Adam Borg raised the price target on Palo Alto Networks (NASDAQ: PANW) to $600.00 (from $560.00) while maintaining a Buy rating.

The analyst commented, "Palo delivered a better-than-expected F1Q22 print, punctuated by 25%-Y/Y product growth and 37%-Y/Y RPO growth given a strong cybersecurity spending environment, solid execution, and ongoing hardware refreshes.

As expected, supply chain issues have crept in, with lead times extending 2-4 weeks and higher input costs (chips, transportation) to fulfill orders. Despite this, we are pleased to see Palo not just beat in the quarter, but also raise FY22 billings/revenue/product revenue guidance and reaffirm operating-margin/FCF margin as it absorbs higher costs.

Net/net, we continue to believe Palo Alto is well positioned across its Network, Cloud, and SecOps focus areas and has a number of drivers to sustain at-least low 20%+ top-line growth and operating margin and FCF expansion in coming years. We also believe Palo is well-positioned to be a natural consolidator of cybersecurity spend and at 7x/21x CY23E EV/revenue and EV/FCF (below peers), valuation remains attractive. Raising TP to $600."

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