Shares of FireEye (FEYE) are on the rise after SunTrust analyst Joel Fishbein upgraded the stock to Buy saying that recent events in Iran and Iraq will lead to increased government and private sector spending in both fiscal 2020 and 2021.
BUY FIREYE AMID TENSIONS IN IRAN, IRAQ: In a research note to investors, SunTrust's Fishbein upgraded FireEye to Buy from Hold and raised his price target on the shares to $22 from $15. Recent events in Iran and Iraq have put the spotlight on cybersecurity and will lead to increased government and private sector spending in both fiscal 2020 and 2021, he contended. Fishbein noted that priorities should include securing IT systems, networks, and information; securing critical infrastructure; and improving incident reporting. The analyst sees improved operating performance, a "favorable tailwind" due to recent geopolitical events, and a potential sale as catalysts for FireEye shares to move higher. Overall, Fishbein pointed out that he likes FireEye's transformation from a breach response company to a more analytically oriented security platform.
IRAN MIGHT RAMP UP CYBER DIRECTED ATTACKS: Iranian general Qasem Soleimani's death escalated tensions between the U.S. and Iran, with many fearing that the later will ramp up its cyber directed attacks. Cybersecurity stocks were on the rise following the strike that killed Soleimani, widely seen as the second most powerful figure in Iran.
Iran has spent years building the capability to execute not only the mass-destruction of computers but potentially more advanced attacks on Western critical infrastructure, according to Wired's Andy Greenberg. The most likely form of cyberattack to expect from Iran will be the so-called wiper malware that is designed to destroy as many computers as possible inside target networks, the report noted, adding that Iranian hackers were responsible for destroying 30,000 Saudi Aramco computers in 2012 and for hitting Last Vegas Sands (LVS) with a wiper in 2014 after owner Sheldon Adelson suggested a nuclear strike against the country. More recently, Iran's hackers have hit private-sector targets in the UAE, Qatar, and Kuwait, as well as Saipem, an Italian oil firm for whom Saudi Aramco is a major customer.
FireEye and CrowdStrike (CRWD) have also recently observed Iranian hacking groups looking for points of ingress into potential targets in the U.S., including the Department of Energy and U.S. National Labs, Greenberg wrote. "We're not sure if it's intelligence collection, gathering information on the conflict, or if it's the most dire concern we’ve always had, which is preparation for an attack," FireEye's director of threat intelligence John Hultquist told Wired back in June.
PRICE ACTION: In morning trading, shares of FireEye have gained almost 3% to $18.07.
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