Fortinet (FTNT) Downgraded as Firewall Refresh Falls Short of Expectations

Fortinet, Inc. (NASDAQ:FTNT) is one of the AI Stocks Analysts Are Backing Right Now. On September 2, Morgan Stanley analyst Meta Marshall downgraded the stock from Equalweight to Underweight with a price target of $67.00 (from $78.00).

According to the firm, Fortinet’s consensus estimates for FY26/27 would likely come under pressure as the company may not be able to sell as many firewalls. This will cause the name to be a “relative underperformer.”

Despite the company’s continued success in attaching additional products to its installed base, the firm believes the smaller-than-expected firewall refresh could result in downward revisions to future estimates, creating a headwind for the stock.

“We see FTNT as continuing to be successful with attaching additional products into their installed base, but with the firewall refresh turning out to be smaller than expected, we think FY26/FY27 estimates may need to come down, creating a headwind for the stock. With FTNT down 17% YTD, more than that since Q2 earnings, one might say the risk has already been priced in.”

“However, with FCF multiple still in the low-to-mid 20s, for what we think could become a high-single digit grower post-refresh, we tend to look at the risk reward more negatively in the near term. Once downdraft in estimates is priced in, we could return to the name as we saw continued traction with US sales expansion, and upsell of additional SASE / SecOps products in the past few quarters, but for now we see shares likely to underperform on relative basis.”

Fortinet, Inc. (NASDAQ:FTNT), a cybersecurity company, provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.

READ NEXT:10 AI Stocks Investors Should Keep on Their Radar and 10 Must-Watch AI Stocks on Wall Street.

Disclosure: None.