Citigroup analyst Tyler Radke has maintained a Buy rating on ServiceNow (NYSE: NOW) while lowering the price target to $156 from $158. The revised target indicates a slight adjustment in the stock's valuation expectations.

The decision to retain the Buy rating suggests continued confidence in ServiceNow's long-term growth prospects despite the modest reduction in the price objective. The previous target of $158 has been trimmed by $2 to reflect updated market conditions or company-specific factors.

Price Target Adjustment

The following table outlines the changes in Citigroup's price target for ServiceNow:

The revision comes as analysts reassess the company's performance and market position. ServiceNow continues to be viewed favorably by Citigroup, as evidenced by the maintained Buy rating.

ServiceNow Inc. shares fell 7.96% to $102.40 on Tuesday, trading lower in sympathy with International Business Machines Corporation (IBM) after the latter reported preliminary second-quarter results that missed analyst expectations. The decline reverses recent gains for ServiceNow, which had been outperforming the broader market, and highlights the sensitivity of ServiceNow's stock to sentiment surrounding its close partner. The drop comes despite the companies announcing an expanded partnership last week aimed at modernizing enterprise systems and unlocking data for AI at scale.

IBM reported preliminary Q2 revenue of $17.2 billion, up 1% year-over-year but falling short of the $17.86 billion consensus estimate. Chief Executive Officer Arvind Krishna described the results as "disappointing" in a letter to investors. Adjusted earnings per share (EPS) came in at $2.93, below the $3.022 estimate, while GAAP diluted EPS was $2.27, down 2% year-over-year. The shortfall was driven primarily by weaker-than-expected performance in IBM's Z mainframe business and its associated software stack.

According to Krishna's letter, clients shifted capital expenditure toward servers, storage, and memory purchases in late June to secure supply-constrained infrastructure ahead of expected price increases. This shift caused numerous large deals to fail to close on IBM's expected timelines, impacting the quarterly figures. The technical picture for ServiceNow had previously improved, with the stock trading above its 20-day and 50-day simple moving averages, but the latest pullback has brought the price closer to the $98 support level identified by traders.

Analysts remain broadly bullish on ServiceNow ahead of its own earnings report, with a consensus Buy rating and an average price target of $137.07. However, the immediate market reaction to IBM's performance suggests investors are cautious about the broader enterprise software and infrastructure spending environment. ServiceNow had been recovering from its April low, but the correlation with IBM's results underscores the interconnected risks within the sector.