Palo Alto Networks price target raised to $225 from $217 at BMO Capital

Investing.com - BMO Capital raised its price target on Palo Alto Networks (NASDAQ:PANW) to $225.00 from $217.00 on Tuesday, while maintaining an Outperform rating on the cybersecurity company’s stock. According to InvestingPro data, PANW currently trades at a P/E ratio of 93.8x, reflecting high growth expectations for this prominent player in the software industry.

The price target increase follows what BMO described as a "solid report" from Palo Alto Networks, which included fiscal year 2026 Next-Generation Security Annual Recurring Revenue (NGS ARR) growth guidance of 26-27% year-over-year.

The company also provided pro forma fiscal year 2028 free cash flow (FCF) margin guidance of 40%, inclusive of the CyberArk acquisition, which BMO noted exceeded their expectations.

BMO Capital cited several factors supporting its positive outlook, including solid performance for the July quarter, lowered investor expectations following the CyberArk deal announcement, the sustained importance of cybersecurity in an "agentic era," and Palo Alto Networks’ broad portfolio.

The firm believes Palo Alto Networks shares "could recover recent lost ground" following the stock’s retreat after the announcement of the CyberArk acquisition.

In other recent news, Palo Alto Networks reported strong fourth-quarter fiscal results, with revenue growth of 16% year-over-year, surpassing Wall Street’s expectations of approximately 14%. The company’s product revenue increased by 19%, outpacing the forecasted 15%, while Subscription/Support revenue rose by 15%. Analysts at Mizuho (NYSE:MFG) maintained an Outperform rating with a price target of $210, citing these robust earnings. Piper Sandler also reiterated an Overweight rating, highlighting improvements in key performance indicators such as total revenue and remaining performance obligations.

BofA Securities upgraded Palo Alto Networks from Neutral to Buy, noting a 32.2% year-over-year growth in Next-Generation Security Annual Recurring Revenue, which slightly exceeded expectations. The firm’s Remaining Performance Obligation also increased by 24.4%, surpassing the anticipated 20.1%. UBS raised its price target for the company to $200, describing the recent performance as positive following the Cybr acquisition. Despite sector challenges, KeyBanc noted Palo Alto Networks’ resilience, with strong product revenue and operating margin results.

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