Fortinet Stock Downgraded by Morgan Stanley Amid Growth Concerns
Fortinet shares fell 3.5% in pre-market trading after Morgan Stanley downgraded the cybersecurity firm from Hold to Sell. Analyst Meta Marshall slashed the price target from $78 to $67, citing near-term headwinds from disappointing firewall refresh cycles.
The downgrade follows Fortinet's Q2 earnings beat overshadowed by weak revenue guidance. Management's disclosure that 40-50% of its $400-$450 million firewall refresh opportunity is already complete sparked concerns about dwindling growth drivers.
While acknowledging potential in SASE and SecOps offerings, Marshall warned consensus estimates remain too optimistic. The stock had previously tumbled after earnings despite surpassing expectations, highlighting market sensitivity to growth sustainability.
