Why This Analyst Expects Fortinet Shares To Climb Even During Recession

Fortinet Inc FTNT is well-positioned as security is likely to remain a priority within IT spending even in the event of a recession, according to BMO Capital Markets.

The Fortinet Analyst: Keith Bachman upgraded the rating for Fortinet to Outperform, while raising the price target to $350 from $325 on a like-for-like basis. "However, given the 5-1 stock split, our target price
goes to $70 a share," said the analyst.

The Fortinet Thesis: Although a recession seems “increasingly likely,” security spending will likely remain resilient, Bachman said in the upgrade note.

“Cyberattacks will not slow during a recession, and given the elevated threat landscape, we think robust security capabilities are increasingly viewed as a necessity,” he added.

“We think FTNT remains well-positioned to gain market share in the firewall, SD-WAN, OT, and secure networking markets, including from CSCO and VMW,” the analyst wrote.

“We believe that FTNT offers a broad and growing portfolio that can drive billings growth of greater than 20% y/y over the next several years, driven by Fabric and FortiGate billings,” Bachman further mentioned.

FTNT Price Action: Shares of Fortinet are down 0.81% to $58.38 at the time of publication Tuesday morning.