On Monday, Stifel adjusted its price target for Palo Alto Networks (NASDAQ:PANW) shares. The firm's analyst has revised the target to $225.00, down from the previous $440.00, while keeping a Buy rating on the stock. The change reflects the recent 2-for-1 stock split that Palo Alto Networks enacted.
The analyst explained that the earnings per share (EPS) estimates were altered due to the new share count post-split. However, the rest of the firm's estimates for Palo Alto Networks remain the same. The stock split effectively halves the previous price target to $220, but Stifel decided to slightly increase it to $225, citing reasons such as multiple expansion within the sector.
Palo Alto Networks completed its stock split on December 16, 2024, an event that typically results in adjustments to stock price targets by analysts to account for the increased number of shares in circulation. This split is intended to make the company's shares more accessible to a broader range of investors by lowering the market price per share.
The analyst's statement highlighted that the new price target of $225 takes into account the stock split while also recognizing the potential for multiple expansion within the group of companies Palo Alto Networks is part of. The Buy rating indicates that Stifel continues to see value in the company's shares despite the reduced price target.
This pricing adjustment by Stifel follows the common practice of recalibrating financial models and targets following corporate actions such as stock splits. It is a reflection of the current market conditions and the firm's ongoing confidence in Palo Alto Networks' performance.
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