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RBC Capital Markets raised its price target on the security software maker to $277 from $232 a share, with a rating of Outperform.
The shares rose 0.7% on Wednesday and are up 83% so far this year.
The analysts see Palo Alto as a primary security vendor for hybrid cloud customers to “future-proof their security framework.”
In a note on Wednesday, the analysts said that while Palo Alto’s history is on the networking side of security “we believe advancements in cloud security and what we see as waves of s-curve growth opportunities position the company well for above-peer growth and margin expansion.”
They called Palo Alto one of their top ideas for 2023, saying success with its Prisma Access firewall product, Prisma Cloud and Cortex XSIAM products bodes well for growth.
“We feel the company can benefit from share gains through bundles (similar discounting strategies from mega-cap peers) as we increasingly see PANW as a strategic consolidator of cyber spending,” they wrote.
