Snowflake ‘s shares have plummeted 59.2% this yr as rising charges threaten well-liked development shares, however Raymond James is “seeing by way of the whiteout.” Analyst Simon Leopold initiated protection of Snowflake with an outperform score, saying in a notice to purchasers Thursday that the corporate is a “share gainer” and a “pure play” within the rising cloud market. “We expect Snowflake’s high quality/market place will allow it to outperform as development proves sturdy and margins transfer considerably greater,” Leopold wrote. “With an absence of clear catalysts and an unfavorable marketplace for ‘development’ shares, we chorus from a powerful purchase score.” Raymond James additionally slapped a $184 worth goal on the inventory, representing a 33.1% upside from Thursday’s shut worth. The agency believes Snowflake can develop at a greater than 50% compound annual development fee over the subsequent three years, including that rising demand for enterprise software program in a post-pandemic world will proceed to profit the corporate. Raymond James additionally likes Snowflake’s attraction to massive and small companies and the benefit of knowledge sharing it affords. “Snowflake lacks public cloud scale, however offsets this with its agnostic place that allows knowledge sharing, a crucial differentiator,” Leopold wrote. “The corporate doesn’t must make the billions in capital investments; slightly, Snowflake runs on the present public cloud platforms from Amazon, Google, and Microsoft.” Traders have shied away from growth-focused know-how shares and moved into safe-haven sectors like on fears of an financial downturn. It comes because the Federal Reserve hikes rates of interest in an effort to curb surging inflation. — CNBC’s Michael Bloom contributed reporting
