Fortinet (NASDAQ:FTNT) shares trade 1.5% higher in pre-market after Bank of America analysts upgraded the stock to Buy from Neutral with a price target of $75.00 per share.
The new price target is based on a premium to cybersecurity peers, but the analysts added that “is warranted given the company’s strong fundamentals.”
“We expressed concerns over weak orders masked by backlog drawdowns; however, trends are solid and we highlight continued strong execution despite a challenged environment, attesting to the high value Fortinet delivers to its customers,” they said in a note.
The analysts believe the strong business momentum offsets concerns centered around backlog drawdowns.
All-in-all, the company is well-positioned to achieve long-term targets.
“We believe that in the current uncertain environment, it is more prudent for investors to focus on the basic value proposition of Fortinet and ignore the quarterly noise of backlog trends. Fortinet is a leading network security company, with a unique hardwareled approach that provides substantial price advantage over competition and enables it to bundle more services into its platforms. The company is also expanding into new areas, and the success of this strategy is evident in its financial results,” they concluded.
Fortinet shares are up 33.7% year-to-date.