Jefferies reiterates ServiceNow stock rating with $175 target

Investing.com - Jefferies reiterated a Buy rating on ServiceNow stock (NYSE:NOW) with a price target of $175.00.

The firm expects ServiceNow to modestly beat on customer commitment calculated remaining performance obligations and subscription revenue. Partners reported a largely in-line first quarter and cited strengthening pipelines into the second quarter.

Jefferies expects ServiceNow to maintain its fiscal year 2026 revenue and margin guidance even on solid results. The firm said the company is building in prudence due to macroeconomic and geopolitical uncertainty and AI-related packaging changes.

The firm said a strong quarter should drive shares higher given the sharp pre-print negativity. The stock currently trades at $94.19, down 48% over the past six months and 39% year-to-date, according to InvestingPro data. An InvestingPro tip notes the stock has "taken a big hit over the last week," reflecting recent market pressure. Updates at the company’s Knowledge event on May 4 on AI, pricing, and long-term targets will be key to bigger gains, according to Jefferies.

ServiceNow provides cloud-based workflow automation and IT service management software. InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value, appearing on the platform’s Most Undervalued watchlist. For deeper insights, investors can access NOW’s comprehensive Pro Research Report, one of 1,400+ available on InvestingPro.

In other recent news, ServiceNow has been the focus of several analyst updates and assessments. Truist Securities lowered its price target for ServiceNow to $125 from $175, while maintaining a Buy rating, citing expectations of strong first-quarter results. Similarly, Oppenheimer reduced its price target to $130 from $175, maintaining an Outperform rating, but noted that the upcoming earnings update might not alleviate concerns about AI disruptions. On a positive note, Bernstein reiterated an Outperform rating with a $219 price target, highlighting the strength of ServiceNow’s AI platform amid concerns over AI agents replacing its core business processes.

JMP Securities upgraded ServiceNow’s rating to Market Outperform, with a $260 price target, following the company’s announcement that its entire product portfolio is now AI-enabled. This integration includes AI, data connectivity, workflow execution, security, and governance at no additional cost. However, UBS downgraded ServiceNow to Neutral from Buy, reducing its price target to $100 from $170, due to concerns about the company’s AI positioning. These recent developments reflect varied analyst opinions on ServiceNow’s prospects in the evolving AI landscape.

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