By Sam Boughedda
ServiceNow (NYSE:NOW) shares sank Friday after UBS analysts raised the firm's price target on the stock to $545 from $465 but said the latest round of partner checks down-ticked from three months ago.
The analysts, who have a Buy rating on the stock, wrote that three out of seven partners missed their 1Q23 ServiceNow practice growth target, and the majority of partners cited incremental demand softness beginning in late-February/early March.
NOW is currently trading at $461.50, down over 4%. However, it is up over 17% so far in 2023.
"We're modestly trimming our cRPO/revs estimates but remain Buy-rated as the demand shifts feel sector-wide and partner growth outlooks for 2023 were 20%+ and largely unchanged," they revealed.
"The consensus view of partners was that the overall macro/IT budget backdrop got no better and most partners cited incremental demand softness beginning in late-Feb/early Mar," the analysts added.
"While the explanations varied, softness in the banking vertical (material for ServiceNow and the rest of the Software sector) was most commonly cited."