The ongoing need for efficiency should create a favorable setup for shares of ServiceNow despite a tough macro climate, according to Baird. Analyst Rob Oliver upgraded the software stock to outperform, saying in a Tuesday note to clients that its end-market resilience and reasonable valuation create an attractive risk-reward balance. “We believe 2023 guidance prudently factors in the current macro and view NOW deals as less discretionary in nature,” he said, noting that the platform offers “productivity improvements and efficiency gains” companies rely on during trying times. NOW YTD mountain ServiceNow shares in 2023 ServiceNow shares had a difficult 2022, tumbling 40.2% as rising rates dealt a heavy blow to many tech valuations. Year to date, the stock has jumped 19.6%. It was up another 2.5% before the bell Tuesday. Oliver views the US and global governments as a “huge multi-year opportunity and innovation engine” for ServiceNow as they embrace cloud applications and do away with older technology. “The White House signed a Customer Experience Executive Order in 2021, which we believe could be a meaningful opportunity as bad customer experiences can erode trust in governments, and technology upgrades can make for more seamless experiences,” he wrote. Oliver upped his price target on shares to $548 to $475, saying that the valuation appeared reasonable given ServiceNow’s sizeable total addressable market, solid positioning and above-average growth potential. The new target implies 18% upside from Monday’s close. “We believe ongoing strong execution and a combination of 20% + revenue growth and operating/FCF margin expansion could help drive multiple expansions over time,” Oliver wrote. — CNBC’s Michael Bloom contributed reporting
Posted inSoftware
Baird upgrades NOW, says stock is well situated for tough macros
Posted by
No Comments
No Comments
Post navigation
Previous Post
Tesla Adds New ‘Manual’ App in Software Update 2023.6