Palo Alto Networks is down 11% in the last month - but Morgan Stanley thinks all the bad news about hacking is about to boost its fortunes

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Palo Alto Network CEO Nikesh Arora could see his company thrive in 2019 and beyond, according to Morgan Stanley.

• Palo Alto Networks is down 11% from where it traded just one month ago, but analysts at Morgan Stanley say now is the time to buy.
• In a note published Monday, Morgan Stanley raised its price target for the cybersecurity company from $262 to $276 - a 26.6% premium on where it's currently trading.
• The company is well positioned in the firewall space at a time when security spending is growing, according to the note.

Things may look grave for Palo Alto Networks, the thirteen-year-old cybersecurity company, which is down 11% from where it traded just one month ago. But Morgan Stanley has high hopes for the company's future.

In a note published Monday, Morgan Stanley analyst Melissa Franchi raised the price target for Palo Alto Networks from $262 to $276 - a 26.6% premium on the company's current pricetag of around $211.25 a share.

The reason? Cybersecurity in on fire thanks to larger IT budgets dedicated to preventing security incidents like the ones recently reported at Facebook and SuperMicro, according to Franchi. This drives "healthy growth, but not unsustainable 'emergency spending'," she wrote.

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Of course, Palo Alto Networks isn't the only cybersecurity company that could see gains. Morgan Stanley also raised its price target for Fortinet Inc., from $67 to $88 - up 6.5% from it's current price of around $82.40.

But Morgan Stanley maintained that Palo Alto Networks is the clear winner when it comes to firewall products in particular. Franchi and her team forecast Fiscal Year 2019 and 2020 revenue estimates that are 3% and 7% ahead of consensus, respectively.

Across the board, as more companies move to the cloud, the market for cybersecurity products is growing, according to the analyst.

"Cloud adoption also holds opportunity for network security vendors, as network traffic increases, virtual appliances get deployed in front of cloud applications and new use cases for firewalls like microsegmentation start to scale. Recent solid results from Palo Alto Networks and Fortinet amid ramping cloud adoption provides support for this view," Franchi wrote.

And this year in particular will see growth, Franchi wrote, because companies are starting to update firewall purchases made in 2015, which tend to have a three to five year life cycle.