Analyst Insight: Morgan Stanley Initiated Coverage Of Check Point Software Technologie

Morgan Stanley analysts are initiating coverage on Check Point Software Technologies (NASDAQ:CHKP) with an equal-weight rating.

Analysts Keith Weiss, Adam Holt and Melissa A. Gorham said, "Strong execution on the recent Nokia acquisition and improved product positioning for multi-function network security devices re-accelerated growth and drove the shares higher over the past year, but the next wave of growth catalysts isn't likely until 2011. The shares remain attractively valued at 14.2x CY11 EPS vs. a 16.8x median for our large cap software names, while positive spending trends in network security likely sustain mid-single digit organic growth. However, CHKP has traded at an avg. 30% discount vs. large-cap software over the past five years. Without a near-term upward inflection in growth, we feel further multiple expansion will be limited and it is too soon to buy the stock."

The bank sees fiscal 2010 EPS of $1.94, vs. consensus estimates of $2.27 per share.

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