Categories: Stock Market

‘Smooth sailing ahead’ for Snowflake, claims Scotiabank By Investing.com


© Shutterstock ‘Smooth sailing ahead’ for Snowflake (SNOW), claims Scotiabank

Scotiabank upgraded shares of Snowflake Inc (NYSE:) to Sector Outperform from Sector Perform in a note Thursday, with analysts lifting the price target to $212 from $137 per share.

The analysts said there is “smooth sailing ahead” for the software company after exiting the storm clouds.

Scotiabank is convinced that Snowflake’s F24 revenue is now firmly underwritten – which they note was previously not the case.

“Snowflake management commentary pointing to a steadying of business trends, and Databricks disclosing that it’s on track for ARR to rise +50% Y/Y in 2QF24, only a 10pp deceleration from 4QF23, suggests that demand for pure-play analytics solutions is holding up. Near-term estimates now being underwritten should support shares,” wrote the analysts.

The analysts added that “Snowflake should benefit from a product cycle in F25/26 – which formerly we could not account for,” while Snowflake “management’s new F29 targets reflect scale and efficiencies as the business matures – which previously was not obvious.”

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