Palo Alto Networks (NASDAQ:PANW) was little changed on Monday after getting downgraded at Raymond James.
The bank dropped its rating on the cyber security company to Market Perform from Outperform after an “incredible run.” Shares have gained 260% over the past two-plus years after a period of underperformance compared to peers.
“To be clear, Palo Alto Networks is a great company, technology leader, execution has been stellar, and [Raymond James] doesn’t fight investors that have a time horizon longer than its 12-month mandate,” the bank said. “However, [Raymond James] believes the risk/reward in the stock is becoming less favorable.”
Shares of Palo Alto Networks (PANW) have doubled over the past year and the company is set to continue to benefit from massive demand for cybersecurity even amid possible macroeconomic weakness. Palo Alto (PANW) has a forward price-to-earnings ratio of about 55 compared to the Nasdaq’s 24.55, indicating its valuation.
The stock has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Seeking Alpha’s quant system, which consistently beats the market, rates the stock a HOLD.