Wolfe Research analyst Joshua Tilton initiated coverage of Palo Alto Networks Inc. shares (PANW) with an outperform rating and $700 price target Monday, writing that while investors seem to view Palo Alto Networks as a place to "hide out" in the current market, they don't appropriately recognize the value and upside potential of its next-generation security portfolio. He wrote that his channel checks indicate sustained strong demand for the company's firewall business, and with the shares trading at 21 times his base-case estimates for enterprise value to 2023 free-cash flow, he thinks that investors can continue to take cover in the stock. "However, if there is one thing to take away from this launch it's that we believe PANW is so much more than just firewall, and it's not getting credit for it," Tilton wrote. "Bottom line, in a market where investors may not be buying new names, we are here to tell you that it's ok to stay invested in PANW for the firewall business, but we really think you should be adding to your position for what's next... total platform domination." The stock has gained 25% over the past 12 months as the S&P 500 has lost about 7%.
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