Wall Street Initiates Coverage on Snowflake
Emmanuella Nwokenkwo & Nikhil Gunderia
Snowflake’s (SNOW) IPO on September 16th was one of, if not, the most highly anticipated IPOs of 2020. In the days before the initial public offering, the share price was expected to remain between $75 and $120. However, demand was so high that Snowflake’s shares opened for trading at $245 and even surged to $319 at one point on the first day of trading. Now, nearly a month since Snowflake went public, several banks have released their outlook on the company’s future.
Goldman Sachs analyst Heather Bellini initiated with a Buy rating and a $268 price target. In a research note, Bellini informs investors that cloud migration and stable data sharing are “strong secular tailwinds” that are driving increased adoption of Snowflake’s products. The analyst thinks that Snowflake will continue to replace current technologies for data warehousing.
Unlike Goldman Sachs, Credit Suisse initiated Snowflake with a Neutral rating and price target of $250. The analysts acknowledge that Snowflake is a “true-pioneer in cloud-native data analytics” and will be instrumental in helping businesses shift their operations towards a more data-centric approach. However, Snowflake’s current stock price already takes into account a significant amount of Snowflake’s future success resulting in initiation at a neutral rating.
Similar to Credit Suisse, J.P Morgan analysts initiated Snowflake with a Neutral rating and a $247 Dec 2021 price target. Analysts mention, at its core, Snowflake is a massively scalable, highly elastic solution for cloud-native data warehouses, that has begun to disrupt the space for cloud data management. Furthermore, analysts state “Snowflake’s cloud-agnostic multi-region solution, with intuitive and efficient data sharing capabilities, lays the foundation for a much broader vision of a new category called the Data Cloud, potentially leading to an open-ended market opportunity with strong inherent network effects.”
Morgan Stanley also initiated Snowflake at an Equal-weight with a price target of $220. Analysts at MS reiterated the sentiment that Snowflake has the ability to “bring the scalability and elasticity of the cloud to data management”. Similarly, they believe that the current stock price incorporates a significant portion of potential long-term growth.
Coverage initiation on Snowflake was relatively moderate with a majority of the research reports arguing for a Neutral rating with a steady price target around $250.
Disclosure: At the time of publication, we are long Snowflake (SNOW). We wrote this article ourselves, and it expresses our own opinion. We are not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.