Bernstein says that says that Palo Alto's (PANW) momentum in firewalls is continuing, and the firm estimates that the company cam more than double its revenue from firewalls over the next five years. Cisco (CSCO) is receiving way too little profit from its installed firewalls, giving it the opportunity to significantly raise its security revenue going forward, according to the firm. Meanwhile, Check Point's firewall business is coming under "mounting pressure" and the firm expects this trend to intensify. Bernstein keeps Outperform ratings on Palo Alto and Cisco, and an Underperform rating on Check Point.

KeyBanc lowered the firm's price target on Palo Alto Networks to $355 from $380 on lower peer multiples, while keeping an Overweight rating on the shares. The firm says that at some point, the case for optimism needs to be backed up by some optimistic data, and its 1Q24 VAR Survey did not deliver it. IT budgets are still in hiding at this point, with just 50% of KeyBanc's respondents meeting or exceeding their goal in the Q1, the lowest quarterly reading since the heart of the pandemic, and sentiment from the follow-up calls with some individuals also has down ticked. The firm's Q4 2023 VAR survey was iffy, the outlook in 2024 from its CIO survey in January was also not great, its SMB survey was worse than expected, and now 2024 is off to a difficult start - "let's just call a trend a trend," KeyBanc adds.