Morgan Stanley Maintains Buy on Palo Alto (PANW) as CyberArk Deal Strengthens Growth Outlook

Palo Alto Networks Inc. (NASDAQ:PANW) is one of the best large-cap tech stocks to buy now. Morgan Stanley’s Keith Weiss reiterated his Buy rating on Palo Alto Networks on August 7, keeping a $205 price target. His view is based on the strategic impact of the company’s planned acquisition of CyberArk Software Ltd. (NASDAQ:CYBR), which he describes as a transformative step in Palo Alto Networks’ shift toward a unified, platform-based security model.

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As announced on July 30, Palo Alto is set to acquire CyberArk in a cash-and-stock transaction worth roughly $25 billion. Under the agreement, CyberArk shareholders will receive $45 in cash and 2.2005 Palo Alto shares for each CyberArk share they own. Expected to close in the second half of Palo Alto’s fiscal 2026, the acquisition is expected to bring Palo Alto a robust lineup of identity security solutions designed to control and verify user access across organizations.

After the announcement, the company reiterated its fiscal year 2025 guidance of a total revenue in the range of $9.17 to $9.19 billion.

Weiss sees the addition of CyberArk’s identity security expertise as a timely move, given the growing importance of identity protection within the broader cybersecurity landscape. He also points to Palo Alto Networks’ track record of strong free cash flow generation and sustained high margins as evidence that the company is well-positioned to integrate and scale this acquisition.

From his perspective, the deal should deliver immediate benefits to revenue and gross margins, with free cash flow per share accretion targeted for 2028. Weiss believes the synergy goals set out in the pro forma model are achievable, which support his positive long-term view.

Palo Alto Networks Inc. (NASDAQ:PANW) provides security solutions to help secure enterprise users, networks, clouds, and endpoints, with platforms such as Prisma Access, Prisma Cloud, and Cortex.

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Disclosure: None. This article is originally published at Insider Monkey.