Citi Raises ServiceNow Price Target to $911, Maintains Buy Rating Amid Strong Deal Momentum

Citi analysts increased their price target on ServiceNow (NYSE:NOW) to $911 from $909 while maintaining a Buy rating on the stock. The analysts believe that ServiceNow is well-positioned to outperform in a sluggish software demand environment due to its expanding automation platform, which is set to gain significant market share through consolidation and the rollout of AI/GenAI use cases across IT and back/mid-office operations.

Despite concerns about macroeconomic softness in Europe, the analysts noted that these are offset by strong performance in North America and the Middle East, as well as significant large deal momentum, including one of the largest deals in the company's history. They anticipate that ServiceNow will continue to deliver healthy financial results, driven by large deal activity, increasing Pro-Plus contributions, and heightened federal activity.

The analysts expect stronger positive revisions compared to Q1, with built-in conservatism and a potential acceleration in the cRPO metric in the second half of the year providing additional catalysts.