Fortinet Inc. (NASDAQ:FTNT) shares declined more than 2% in premarket after Morgan Stanley downgraded the stock to Underweight from Equal Weight and cut its price target to $67 from $78.

The firm said firewall refresh cycles were proving weaker than expected, which could pressure FY26-27 consensus estimates. While Fortinet continued to see traction in attaching new products across its installed base, analysts projected slower growth would weigh on the stock's relative performance.

Morgan Stanley acknowledged shares were already down 17% year-to-date, but said valuation remained stretched, with the company still trading at a low-to-mid 20s FCF multiple. The analysts projected Fortinet could become a high-single-digit grower post-refresh, making the near-term risk-reward less attractive.

The firm said it could revisit the stock once estimate revisions were absorbed, noting Fortinet's continued momentum in U.S. sales expansion and cross-selling of SASE and SecOps products.