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Morgan Stanley analysts upgraded Box (NYSE:BOX) to Overweight from Equal-weight with a new price target of $34 per share, up from $32.
The analysts highlight several factors behind the upgrade, including 1) Solid relative macro positioning w/ compelling ROI and value in Box Suites, 2) strong execution, 3) a more favorable competitive landscape, and 4) upside to margin expansion.
The analysts add that customers are more and more realizing the value of the full Box platform, which is described as a “key in a challenging macro.”
“A large TAM, relatively durable constant currency growth expectations, margin expansion, real FCF support, share buybacks and undemanding valuation trading at just 13x EV/CY23FCF – a +45% discount vs. the software median at ~24x EV/FCF – supports our upgrade to Overweight and shares moving higher toward our new $34 price target,” the analysts further said in a client note.
The analysts add that BOX screens well against Morgan Stanley’s key themes, opposite to DocuSign (NASDAQ:DOCU) which saw its rating downgraded to Underweight by the analysts.
Box shares are trading over 3% higher today.
