Deutsche Bank Downgrades FTNT to Hold From Buy

Deutsche Bank is raising its forecast and price target significantly ($32 to $40) but downgrading Fortinet, Inc. (NASDAQ: FTNT) “as we believe the valuation (22x 2011 EV/FCF) drives a balanced risk/reward.”

“We continue to believe that FTNT is positioned for strong growth in 2011 (forecast organic billings growth of 25% y/y) but at stock's current valuation, we believe the stock will perform in-line with the NASDAQ,” Deutsche Bank writes.

“We remain positive on FTNT's growth and cash flow prospects but to justify a materially higher stock price we would need to see significant upside to our current forecasts.”

Fortinet, Inc. closed Tuesday at $36.67.