C3.ai drops as Morgan Stanley, JP Morgan "underweight" out of the gate
04/01/2021 14:15
** C3.ai Inc AI.N shares down ~5% at $132 premarket as IPO
banks initiate coverage of artificial intelligence software firm
after quiet period expires
** Morgan Stanley and JP Morgan start with "underweight"
ratings. The banks, which acted as lead bookrunners for AI's
IPO, assign PTs of $100 and $84 PT, respectively
** "With proven technology, we see a compelling growth
opportunity ahead, but at 61x CY22 sales, success as a dominant
ML (machine learning) platform looks priced in resulting in an
unfavorable risk/reward," Morgan Stanley writes in note
** JP Morgan points to stock trading 427% above initial IPO
filing range midpoint, saying sees "negative risk-reward at
these levels," the thefly.com reports https://thefly.com/landingPageNews.php?id=3219886&headline=AI-Cai-initiated-with-an-Underweight-at-JPMorgan
** BofA starts with "neutral" and $170 PT, while Deutsche
Bank issues "hold" rating with $120 PT
** But Wedbush is most bullish with "outperform" and
Street-high PT of $200, citing TAM (total addressable market) of
$270 bln
** "We view C3.ai as one of the more disruptive enterprise
software vendors in the last decade with the company laser
focused on the convergence of AI, big data, and cloud
computing," Wedbush says in note
** AI shares more than doubled in their Dec 9 debut and are
currently 230% above their $42 IPO price urn:newsml:reuters.com:*:nL4N2IP3L6
(Lance Tupper is a Reuters market analyst. The views expressed
are his own
Additional reporting by Sohini Podder in Bengaluru)
((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 1-332-219-1430
sohini.podder@thomsonreuters.com))