ServiceNow’s Unique Growth at Scale Drives Optimism
Leading financial firm Raymond James has initiated coverage of ServiceNow (NOW) with a promising Outperform rating and a price target of $1,200. This optimistic outlook is driven by the company’s remarkable growth at scale, which has sparked concerns about its durability.
Balancing Long-term Potential with Near-term Challenges
While Raymond James acknowledges that ServiceNow’s near-term valuation may be challenging, the firm believes that the company’s long-term prospects are strong. With total company growth expected to remain in the 20% range, the analyst predicts that the stock will outperform if this growth trajectory holds true.
Relative Valuation Multiple Holds Steady
The firm’s positive view is also supported by the relative valuation multiple holding steady, which suggests that the market is pricing in the company’s growth potential. This stability is a key factor in Raymond James’ decision to initiate coverage with an Outperform rating.
Industry Peers and Competitors
In related news, other analysts have also raised their price targets for ServiceNow, with Canaccord, Stifel, and Wolfe Research all increasing their targets to $1,200, $1,175, and $1,225, respectively. Meanwhile, Broadcom has reached a market capitalization of over $1 trillion, driven in part by enthusiasm for its AI capabilities.
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