Palo Alto Networks, Inc. (PANW) Stock Forecasts

Summary

Two recent inflation reports indicated that overall pricing pressures continue their downward trek. But both also confirmed that inflation remains above the Fed’s target of 2.0%. Let’s first take a deeper dive into the Consumer Price Index. There were some positive results here. According to the latest CPI report, the overall inflation rate in August of 2.5% was lower than the prior month’s 2.9%. That good news was supported by a low reading in the monthly core CPI rate. The core CPI excludes the impact of food and energy and rose 0.3% from July to August, consistent with subdued readings for the past six months. What’s still propping up core CPI? Transportation Services (+7.9% YOY) and Shelter (+5.2%). These elements of the index tend to have stickier prices. In contrast, prices for Gasoline and New and Used Cars are lower year over year. The other inflation report was the Producer Price Index. The PPI measures pricing trends farther up the supply chain, at the manufacturing level. Here, we also saw a decline in the rate of inflation. For example, the PPI final demand annual rate through August was 1.7%, compared to 2.1% in July. We expect pricing pressures to continue to ease as the housing market cools, s