ServiceNow Shares Likely to Continue Facing Downward Pressure, Morgan Stanley Says

MT Newswires Live04-23 22:56

ServiceNow (NOW) shares are likely to continue facing downward pressure due to limited visibility on inorganic impact from recent acquisitions and a lack of upward revision to full-year guide, Morgan Stanley said in a Thursday research report.

Management forecast "major revenue acceleration" in H2, which could be supported by faster adoption of the Now Assist and positive channel feedback across the durability of the core business and growing demand for newer services, analysts wrote.

AI product adoption was solid in Q1, with Now Assist continuing to perform well alongside the company's AI Control Tower and RaptorDB Pro offerings, the firm noted. The company expects Now Assist 2026 sales of $1.5 billion from $1 billion earlier, according to the note.

The upcoming analyst day on May 4 gives the company a chance to clear noise coming out of Q1, the firm noted.

The brokerage said it reiterated its overweight rating on the stock and adjusted its price target to $180 per share from $210.

Price: 85.26, Change: -17.81, Percent Change: -17.28

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