This cybersecurity stock to rally more than 30% on a sales rebound, Jefferies says

Key Points
  • Jefferies raises its rating for Palo Alto Networks to buy from hold, predicting its sales growth will improve later this year.
  • The firm increases its price target for the company to $150 from $130, representing 32 percent upside from Thursday's close.
Mark McLaughlin, president and CEO of Palo Alto Networks.
Mary Catherine Wellons | CNBC

Investors should buy shares of Palo Alto Networks because the company's sales growth will improve later this year, according to Jefferies, which raised its rating on the cybersecurity technology company to buy from hold.

The company's shares have fallen 9 percent this year through Thursday compared with the S&P 500's 6 percent return. Palo Alto Networks reported weaker-than-expected fiscal second-quarter results on Feb. 28.

"We believe customers likely delayed purchases of new appliances in anticipation of imminent new and improved offerings," analyst John DiFucci wrote in a note to clients Friday. "We believe product sales growth will re-accelerate at some point over the next two quarters."

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