JPMorgan upgrades Snowflake, says stock can rally 30% from here

There may be some big wins ahead for Snowflake, JPMorgan said on Thursday. The company upgraded the cloud data provider’s shares to overweight from neutral. JPMorgan is also repeating its $ 165 price per share target, which is 30% above Wednesday’s close. “We are gradually convinced that Snowflake is reaching a turning point in the generation of material FCF, and we believe that the trend line has the potential to surprise positively and create the initial framework for FCF-based valuation support,” said analyst Mark Murphy in a note. Murphy noted that Snowflake shares are trading at a big discount from when they were priced at more than $ 400 in November. Their current price is slightly higher than the IPO of $ 120 from September 2020. JPMorgan’s upgrade comes after the company conducted a survey of 142 information managers where Snowflake was ranked No. 1 in the installed base spending intentions and disproportionately # 1 among new companies whose vision impressed most on the respondents. ” “Snowflake takes advantage of demonstrable secular tailwinds that are illustrated quantitatively and qualitatively in our CIO survey,” he added, while showing a positive cash flow for FY23, “creating an attractive risk / reward dynamic.” Murphy said that Snowflake has an “excellent position” among customers, based on customer interviews conducted by the bank. He also highlighted the long-term vision for the company, as it was presented at a recent investor day. It “consolidates its position as a critically emerging platform layer in the enterprise software stack,” Murphy said. – CNBC’s Michael Bloom contributed reporting.