Palo Alto Networks is likely to regain ground as companies bump up their security budgets, according to KeyBanc. The bank upgraded the cybersecurity stock to overweight from sector weight. It also put a $380 price target on shares, implying nearly 18% upside from Thursday’s close. “We are upgrading shares of PANW to Overweight as we expect security budgets to accelerate through 2027, Palo a leading beneficiary of the trend toward consolidation with strong product offerings in key areas to secure AI and defend against the accelerated AI threat environment, and Palo out-executing many of its cyber peers,” analyst Eric Heath said Thursday in a note to clients. Heath added that cybersecurity trends show a move toward consolidating cybersecurity services at enterprises, with Palo Alto as one of the major beneficiaries of that shift. Palo Alto has retreated about 19% over the past month as concerns about its elevated valuation have swirled. PANW 1M mountain Shares are down roughly 19% over the past month. That decline offers an “attractive entry point” for investors, according to KeyBanc. “Along with our positive [first fiscal quarter] checks and the … pullback in shares the past month, we see an attractive entry point,” Heath wrote. KeyBanc’s call falls in line with consensus on Wall Street. Of the 55 analysts covering Palo Alto Networks, 44 have a buy or strong buy rating on the stock, LSEG data shows. Palo Alto Networks shares were up nearly 3% in the premarket.
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