Fortinet price target cut at Deutsche Bank on high exposure to Russia, Ukraine
Fortinet (NASDAQ:FTNT) received some negative commentary from Wall Street, as Deutsche Bank cut its price target on the cybersecurity company, noting it has high exposure to Russia and Ukraine, which could hurt revenues this year.
Analyst Patrick Colville, who rates Fortinet (FTNT) sell, lowered his price target to $250 from $305, noting that while the company "executed well" in 2021 as the result of healthy demand for cybersecurity products, the fourth-quarter was softer than the first three and the first time product revenue was lower than estimates.
The analyst also noted it's difficult to estimate Fortinet's (FTNT) business, as it could see up to a 2% revenue hit from Russia's invasion of Ukraine, due to the company likely having a high exposure to both countries. 
"Russia's military invasion of Ukraine has been accompanied by cyberattacks, but the scale and scope of actions (thus far) have been more muted than many expected," Colville wrote in the note to clients.
In conjunction with the price target cut for Fortinet, Colville raised the price target on Check Point (CHKP) to $160, up from $154.
Fortinet (FTNT) shares fell slightly less than 0.5% to $296.50 in premarket trading on Thursday.
In addition, Colville noted that Fortinet (FTNT) has a growing backlog of $162 million, up $122 million, and it is moving past a time frame when ALAXALA Networks, which Fortinet (FTNT) owns 75%, generated an "inorganic contribution" for the company. 
"We assume a 2 [percentage point] contribution to growth will lap from [third-quarter 2022] onwards," Colville wrote, adding that the company faces "tough" year-over-year comparisons. 
Earlier this month, Fortinet (FTNT) shares crashed after the company said it was suspending its Russian operations due to the invasion of Ukraine.




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