Palo Alto Networks slips as Piper Sandler cuts price target on lower multiple
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Palo Alto Networks (NASDAQ:PANW) shares fell nearly 3% in mid-day trading on Thursday as investment firm Piper Sandler lowered its price target on the cybersecurity company. 
Analyst Rob D. Owens lowered his price target on Palo Alto Networks (PANW) to $220 from $230, noting a lower earnings multiple due to compression, noting that the company is in the process of consolidating security across networks, cloud computing and Cortex XDR.
"Despite a challenging 2022 for much of the space, PANW again delivered a year of relative outperformance down -25% vs. the -41% average for our coverage universe," Owens wrote in a note to clients.
Owens kept the firm's overweight rating on Palo Alto Networks (PANW) and said it was one of the firm's top software stocks heading into the year, however.
Owens added that Palo Alto's (PANW) "solid" results throughout the year have helped evolve the platform consolidation in front of it, along with its core firewall and next-generation security businesses. He also noted that the annual recurring revenue of its next-generation security business has reflected "strong trends" with a high-double digit growth rate.
"Inputs from our CIO survey seem to indicate that appetite for consolidation should accelerate in 2023, with PANW addressing a number of critical security categories," Owens added. 
"We remain confident in PANW's ability to execute in an increasingly challenging macro, as the diversified platform should continue to take wallet share within the company's blue-chip customer base, especially as integration efforts continue to materialize." 
The firm also lowered price targets on several other companies, including CrowdStrike (CRWD), CyberArk (CYBR), Fortinet (FTNT) and several others.
Cyber security stocks were mostly weaker in afternoon trading on Thursday, including notable losses for CyberArk (CYBR), Check Point Software (CHKP), Tenable (TENB) and Zscaler (ZS), among others.
Last month, Morgan Stanley listed Palo Alto Networks (PANW) among its top software picks for 2023.