The share price of Check Point Software Technologies Ltd. (Nasdaq: CHKP) is traded at a 12-year high, following Tuesday's 3.8% jump to $65.93, giving a market cap of almost $13 billion. The jump was in response to the company's financial report for 2013, its guidance for 2014 that is in line with analysts' forecasts, and its $1 billion share buyback plan. Analysts' covering the share took the opportunity to update their models and raise their target price by $2-9.
Citi Research analyst Walter Pritchard reiterated his "Buy" recommendation for Check Point and raised his target price from $70 to $75, saying, "Check Point is the best way to participate in the growth in security, with numbers that likely have upward bias from here and a valuation that is unassuming."
Merrill Lynch reiterated its "Buy" recommendation for Check Point and raised his target price from $66 to $75, noting its momentum and favorable long-term risk/reward profit, alongside it strong free cash flow.
Credit Suisse analyst Philip Winslow gives Check Point an "Outperform" recommendation and raised his target price from $67.50 to $72.50, saying that the fourth quarter was the first quarter of renewed rapid revenue growth, which should continue in 2014.
JPMorgan gives Check Point an "Outperform" recommendation for Check Point and raised his target price from $67 to $72, noting the expansion of the share buyback plan from $135 million per quarter to $200 million. It likes the step, but would like to see more, and notes that management is focusing on mergers and acquisitions, and that it is necessary to wait and see whether there will be more activity in this area.
Goldman Sachs gives Check Point a "Neutral" recommendation and raised his target price from $60 to $66 - a zero upside on the current price. It feels that the company's management prefers acquisitions to increasing shareholders' returns, noting that there are shareholders who would prefer the opposite, given the company's current value.
UBS also gives Check Point a "Neutral" recommendation and raised his target price from $60 to $67, and predicts a good year for the company, as it will benefit from market trends. It warns, however, that while the valuation is reasonable on the basis of cash flow, cash is not going to shareholders and that the easy money in the share has already been made.
Published by Globes [online], Israel business news - www.globes-online.com - on January 29, 2014
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