Barclays downgrades Check Point

Gil Shwed

Barclay also lowered its target price for Check Point to $83, still 6.7% above the current market price.

Barclays believes that the Check Point Software Technologies Ltd. (Nasdaq: CHKP) share price will find it difficult to achieve outperformance in 2016. Barclays lowered its target price for the Check Point share from $91 to $83, although the new target price is still 6.7% higher than the current market price.

Check Point, which provides Internet and information security solutions, has a current market cap of $14.1 billion. Barclays says that the company began losing market share in 2014, and that the anticipated 2016 spending environment is likely to prevent the company from expanding its multiples.

The bank qualifies its evaluation, however, writing, "We clearly view the stock as inexpensive with impressive ROIC numbers, which is why we emphasize this is a relative UW rating and not an absolute short call."

Barclays notes that according to IDC data, Check Point's Internet security market share declined from 14.9% to 14.4% in 2014, adding "While this is not a big change and Check Point remains twice larger as its next competitor, we think the slight decline is noteworthy."

Barclays predicts 7% growth in spending on security in 2016-2017, and 8.5% growth in spending on Internet security, compared with 12% growth in 2015. The bank also says that the company's market share in areas of operation that are not part of its core business is also not expected to grow significantly.

Published by Globes [online], Israel business news - - on January 7, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

View comments in rows
Update by email about comments talkback
Your name
Please insert your name
Hyperlink in a new window Hyperlink Right Left underline italic bold Bulleted List Ordered List Face1 Face2 Face3 Face4 Face5 Face6
Your comment

You comment was recieved and soon will be published.
In posting comments, I agree to abide by the Terms of Use
Globes encourages lively and frank debate, but posts that the editors consider merely abusive or otherwise inappropriate will be removed. Report inappropriate content
Thank you for posting your comment, which will be reviewed for publication.
Loading Comments...load
Load more comments
Twitter Facebook Linkedin RSS Newsletters גלובס Capital  Markets Conference 2017