Julius Baer sees 20.8% upside in Check Point

Gil Shwed  photo: Tamar Matsafi

The investment bank has raised its recommendation for the Israeli cybersecurity company to "Buy."

Investment bank Julius Baer has raised its recommendation for Israeli cybersecurity company Check Point Software Technologies Ltd. (Nasdaq: CHKP) to "Buy" and raised its price target from $115 per share to $140, a 20.8% premium on the company's closing price on Nasdaq yesterday. The company's share price has fallen 12.8% since the start of 2021 and it currently has a market cap of $16.3 billion.

Julius Baer's analysts feel that the company is well positioned to benefit from the growing demand for web security solutions, although they are also concerned about consolidation in the market amid more intensive competition in the firewall sectors. They recount that Check Point, led by cofounder and CEO Gil Shwed, reported strong results for the fourth quarter and full year 2020 and they see strong growth in subscriptions as Check Point moves to a focus on that business model.

Julius Baer says that of the 26 analysts covering Check Point, 19 hold a "Neutral" recommendation, 4 are positive and three are negative. The average share price target is $133.4.

Julius Baer lists Check Point's strengths and weaknesses. The strengths include the fact that the company's is the strongest in the pure play sector with solutions based on hardware and software architectures. Check Point also has a high profit margins and strong cash flow and balance sheets.

In terms of weaknesses, Julius Baer says that Check Point has weak sales channels and inefficient expansion into new fields and that a clarge part of its legacy solutions are firewall with slow growth, and there is more likelihood of a downside than upside in profit margins.

Published by Globes, Israel business news - en.globes.co.il - on February 23, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Gil Shwed  photo: Tamar Matsafi
Gil Shwed photo: Tamar Matsafi
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018