Citi analyst Tyler Radke has revised the price target for ServiceNow (NOW, Financial), reducing it to $1,082 from the previous $1,426, while maintaining a Buy rating for the company's stock. This adjustment reflects revised expectations for ServiceNow's performance in light of recent partner feedback and economic trends.
The revision comes after two out of three ServiceNow partners fell short of expectations in the first quarter. These shortfalls were attributed to delays in deal closures, which were influenced by initiatives for Department of Government Efficiency and uncertainties surrounding tariffs. Although the firm anticipates that tariffs will have a minimal direct impact on the software sector, broader economic conditions are expected to suppress demand.
Despite these challenges, Citi maintains a positive long-term outlook for ServiceNow, citing the company's strong focus on automation and efficiency as key factors that will help it navigate the anticipated economic slowdown. These elements are expected to lend resilience to ServiceNow as broader market conditions evolve.
