Bernstein downgrades Palo Alto Networks after recent rerating
Shares of cybersecurity company Palo Alto Networks PANW.O were down about 2% at $366.59 in premarket trading.
Bernstein downgraded the stock to "market-perform" from "outperform".
The firm raised its price target to $351 from $253 after increasing its sales multiple to 21x from 14x.
Bernstein said PANW now appears fairly valued relative to its updated sector valuation framework, with limited upside after a recent rerating.
It added that AI-driven demand tailwinds and Flex contracts are helping support cybersecurity growth, but cautioned that current sector valuations imply a degree of growth acceleration that may be difficult to achieve.
According to LSEG data, 44 of 56 brokerages rate the stock "buy" or higher, 11 rate it "hold" and one rates it "sell"; the median price target is $410.
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