Morgan Stanley upgraded ServiceNow (NOW) to Overweight from Equal Weight with a price target of $1,250, up from $1,040. The company’s “consistent” execution’s has been overshadowed by risks related to generative artificial intelligence and federal spending concerns, the analyst tells investors in a research note. However, Morgan Stanley believes ServiceNow is well positioned to deliver generative AI capabilities, creating an attractive risk/reward for the shares. It sees the company positing 20% subscription and over 20% free cash flow growth through fiscal 2027.
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