ServiceNow stock gains after Morgan Stanley upgrade

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Shares of ServiceNow Inc. are up more than 3% in Thursday morning trading after Morgan Stanley analyst Keith Weiss upgraded the stock to overweight from neutral. He expects “workflow automation” will be a greater priority coming out of the COVID19 crisis, positioning ServiceNow to sustain 25%-plus revenue growth. “The strategic nature of ServiceNow’s Workflow Automation platform has taken center stage in CY20, as billings growth sustained much better than peers throughout the downturn, only decelerating to 27% growth from 34% growth in CY19, and we forecast new billings growth to accelerate in a better demand environment in CY21,” Weiss wrote. He also sees potential for “durable” 30%-plus growth in free-cash flow through calendar 2023. He upped his price target to $652 from $559 in conjunction with the upgrade. ServiceNow shares have added 85% so far this year as the S&P 500 has risen 10%.
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