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Positive Industry Feedback On Fortinet Turns Goldman Bullish

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Jayson Derrick
·2 min read
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The bull case for Fortinet Inc (NASDAQ: FTNT) is based on firsthand checks and conversations that point to a faster-than-expected recovery, according to Goldman Sachs.

The Fortinet Analyst: Brian Essex upgraded Fortinet from Neutral to Buy with a price target lifted from $143 to $150.

The Fortinet Thesis: Conversations and checks with industry participants suggest recent challenges in large enterprise markets are "abating" sooner than expected, Essex said a Tuesday upgrade note.

Goldman's CIO survey suggests improving firewall demand through the end of 2020, while another survey indicates "signs of follow-through," the analyst said. 

Related Link: Benzinga's Top Upgrades, Downgrades For October 20, 2020

Fortinet's WAN Edge infrastructure market share stood at 10% in the second quarter, making it the third-largest vendor by market share, he said.

The integration of Fortinet's security capabilities along with SD-WAN architecture helps enterprises put secure networking in place at a lower cost, Essex said. 

Fortinet's acquisition of OPAQ Networks is a "strategic positive," the analyst said.

Fortinet could leverage the newly acquired technology through its service provider installed base, he said, adding that this represents a potential catalyst that is being overlooked by the market.

Fortinet's stock is trading at 22.3 times EV/NTM FCF versus the security software average of 23.9 times, Essex said.

Fortinet's discount to the group represents an "attractive entry point," and the company has multiple drivers to justify a higher valuation, according to Goldman Sachs.

FTNT Price Action: Shares of Fortinet were trading higher by 2.83% to $132.46 at last check Tuesday.

Latest Ratings for FTNT

Oct 2020

Goldman Sachs

Upgrades

Neutral

Buy

Aug 2020

Deutsche Bank

Initiates Coverage On

Hold

Aug 2020

Citigroup

Maintains

Sell

View More Analyst Ratings for FTNT
View the Latest Analyst Ratings

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