How did ServiceNow stock react to the rating?

The stock fell 0.7% in midday trading to $102.50.

CLSA Initiates ServiceNow Coverage with Underperform Rating

Q: Why did CLSA downgrade ServiceNow?

Due to slowing enterprise software spending and the stock's high valuation compared to peers.

CLSA initiated coverage of ServiceNow (NOW) with an Underperform rating and a $72 price target, implying about 30% downside from the current stock price of $102.50. Shares slipped 0.7% following the announcement.

July 21, 2026

2 min read

Source: TheStreet

Key Numbers

stock price

$102.50

price target

$72

downside

30%

stock change

-0.7%

CLSA initiated coverage of ServiceNow (NOW) with an Underperform rating and a $72 price target, according to a report released today. The stock slipped 0.7% in midday trading to $102.50.

Rating Change

Previous Rating: N/A (initiation).
Current Rating: Underperform.
Price Target: $72, implying 30% downside from the previous close.

Analyst Rationale

Analyst Bhavtosh Vajpayee of CLSA cited slowing enterprise software spending and the stock's high valuation relative to peers as key reasons for the bearish stance.

Context

ServiceNow (NOW) shares have had a mixed year, down about 15% year-to-date in 2026. Other analysts remain divided; some see the stock as undervalued, while others flag competitive pressures.

What to Make of This

The CLSA rating reflects a cautious outlook on ServiceNow amid current market conditions. Investors may want to monitor the company's upcoming quarterly results for actual performance.

Frequently Asked Questions

CLSA set a price target of $72, implying about 30% downside from the current stock price.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.