ServiceNow downgraded to Sell from Neutral at Guggenheim

Guggenheim downgraded ServiceNow to Sell from Neutral with a $640 price target. While the company’s Q2 report on July 24 “will be fine,” the second half of 2024 presents risk to consensus subscription estimates, which presents “material risk in the stock,” currently trading at a “rich” valuation, the analyst tells investors in a research note. The firm says that while ServiceNow seems to be expecting an uptick in generative artificial intelligence business in the the second half of 2024, its field work indicates this is not likely until 2025, “if ever.” Partner checks were generally positive for Q2, but not as positive as they usually are, adds Guggenheim.