Pricing pressure across sector= extreme caution warranted
11:32 AM EST, 12/02/2024 (MT Newswires) -- CrowdStrike (CRWD) and Palo Alto Networks (PANW) are increasing discounts to accelerate market share gains in cybersecurity, creating potential broader pricing pressures across the sector, Morgan Stanley said in a report on Monday.
The firm said it remains positive on long-term trends in cybersecurity, driven by expanding technology industry with generative artificial intelligence and public cloud adoption.
However, a tougher spending environment, pricing pressures, uncertain US fiscal policies, and high valuations necessitate a more selective approach for 2025.
Morgan Stanley downgraded SentinelOne (S) and Tenable (TNB) to equal-weight from overweight and upgraded Okta (OKTA) to overweight from equal-weight. Okta's price target was raise to $97, while Tenable's price target was lowered to $47.
The brokerage also raised price price target for Fortinet (FTNT), CrowdStrike and CyberArk Software (CYBR) to $113, $390 and $316, respectively.
Price: 346.98, Change: +1.01, Percent Change: +0.29
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