On Monday, Morgan Stanley (NYSE:MS) analysts revised their rating for Wix (NASDAQ:WIX).com shares, upgrading the stock from Equalweight to Overweight and increasing the price target to $276 from the previous $248. The analysts cited several key factors for the optimistic outlook, including an uptick in growth among Self-Creators spurred by advancements in artificial intelligence. They also noted a consistent rise in the Partners segment, driven by compounding subscription growth.
The analysts highlighted that Wix.com's increased focus on operational discipline is expected to lead to higher free cash flow (FCF) generation. This potential for improved financial performance, according to Morgan Stanley, has not been fully reflected in the current stock price. Wix.com shares are currently trading at 0.81 times growth-adjusted value, which is below the average of their peers, who trade at 0.97 times.
Wix.com, listed on NASDAQ:WIX, offers a cloud-based platform that allows users to create and manage websites. The company's recent initiatives to integrate artificial intelligence into its services are seen as a significant growth driver, enabling users to create more sophisticated and personalized web experiences.
The upgrade by Morgan Stanley suggests confidence in Wix.com's strategy and its ability to outperform the market, particularly in the areas of innovation and customer acquisition. The new price target of $276 represents Morgan Stanley's expectation of the stock's potential to rise from its current valuation.
The move by Morgan Stanley to upgrade Wix.com's stock to Overweight is a signal to investors that the firm believes in the company's growth prospects and its ability to generate value. The increase in the price target further emphasizes their positive stance on the stock's future performance.
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