Palo Alto, Salesforce among stocks seeing price target raised at Mizuho ahead of earnings

Mizuho Securities raised the price target of several enterprise software stocks ahead of the companies’ reporting their quarterly results, while noting that its favorite October-ending stocks to own ahead of the prints were Palo Alto Networks (PANW), Snowflake (NYSE:SNOW) and CrowdStrike (CRWD).

Analysts led by Gregg Moskowitz said several important large-cap software vendors are due to report October quarter results, starting with Palo Alto and Snowflake (SNOW) on Nov. 20. The market is very much in ‘risk on’ mode, and software sentiment has surely upticked as well.

The analysts added that their checks for the October period were solid across cloud (including consumption) and cybersecurity, and they do not believe the U.S. election was much of an impediment to spending. They noted that AI uptake is picking up.

The analysts said they raised price targets on some companies due to the recent increase in comp multiples combined with the roll-forward to CY26 as their primary valuation point.

Moskowitz and his team noted that Enterprise Software near term Enterprise value-to-sales, or EV/Sales, valuations are now 35% below five-year peak levels, and 5% below five-year average levels. Despite near-term pressures, the analysts reiterated their view that the software group deserves a healthy valuation premium to historical norms due to — digital transformation; the confluence of several megatrends such as AI, DevOps, and Next-Gen Security; and the pervasive sector transition to greater recurring revenue.

Palo Alto Networks (PANW): The firm raised its price target to $450 from $400 and kept its Outperform rating on the stock. The analysts noted that their checks indicated another healthy quarter of demand for Palo Alto, including several larger deals despite this being the company’s seasonally slowest quarter.

In addition, they believe Palo Alto will show good upside to Street targets for next-gen security annual recurring revenue, or ARR.

CrowdStrike (CRWD): Mizuho maintained its Outperform rating and $375 price target on the shares. The analysts said their CrowdStrike checks were mixed, as was expected in the aftermath of the IT outage in July. However, they believe that business improved as the quarter progressed, and that the company’s Falcon Flex program is gaining strong traction with customers. The analysts also saw in a survey that customers continue to have high-interest in a range of CRWD modules.

Snowflake (SNOW): The firm reiterated its $165 price target and Outperform rating on the stock. In spite of negative investor sentiment, the analysts said, their partner checks on Snowflake were generally good, including solid overall consumption and one large net new logo win. They believe Snowflake can show healthy product revenue upside this quarter.

Salesforce (CRM): Mizuho kept its Outperform rating and raised the price target on the shares to $370 from $300. Analysts Moskowitz and his team said their checks for Salesforce this quarter were good overall. While net new business remains soft, they believe that Salesforce drove strong renewal business. They believe Salesforce will show solid fiscal third quarter constant currency cRPO upside. Even so, they expect the third quarter will likely take a back seat to early commentary on Agentforce, which has been the main catalyst of Salesforce’s recent stock surge (up 32% since early September).

Mizuho maintained its Neutral rating on Zscaler (ZS) and increased the price target on the shares to $210 from $195. Meanwhile, Rubrik’s (RBRK) price target was raised to $47 from $43 and Outperform rating was reiterated by the firm.

GitLab (GTLB) kept its Outperform rating, while its price target was increased to $67 from $62. Okta’s (OKTA) Neutral rating and $92 price target was maintained by the firm.