Analysts Jayson Noland and Michael Hoffmann maintain their Hold rating on Fortinet shares and reduced target price from $38 to $34. On the other hand, they are positive on Palo Alto shares based on the channel feedback.
The brokerage pointed out Fortinet's inability to execute sales plan in North America and the Great Britain, which got hurt by Brexit-connected issues. The firm continued to see uncertainty clouding on the capacity to implement go-to-market plan and made Baird to remain in the sidelines.
As far as the long-term for Fortinet, the firm pointed out its confidence in CEO Ken Xie and the growth prospects besides maintaining the operating margin objective of about 20 percent by the turn of the current decade.
In a research note, the lead analyst stated, "Our FQ3 Enterprise IT Survey indicated that security spending remains especially healthy compared to other sectors of the IT market. Fortinet, however, received mixed reviews from channel partners, scoring much lower relative to peers like Palo Alto Networks and Cisco, who were identified as security outperformers."
Although the brokerage sees normalization in the industry growth, the firm thinks network security continues to be a top priority for enterprise customers.
At Last Check ...
- Fortinet was down 11.35 percent at $30.22.
- Palo Alto was down 0.8 percent at $154.24.
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