Manhattan Associates Inc (NASDAQ:MANH) stock climbed 4.1% in premarket trading on Monday after Morgan Stanley raised its rating on the supply chain software firm to Overweight from Equalweight.
Analyst Chris Quintero also increased his price target on the shares to $250, up from $180, pointing to faster cloud bookings and what Morgan Stanley describes as early commercial traction for a set of newly developed artificial intelligence agents.
The upgrade reflects what the analyst team characterizes as a structural momentum shift tied to recent go-to-market changes implemented under Chief Executive Officer Eric Clark. Those changes include focused cross-sell efforts aimed at multi-year renewal cohorts coming up over the next several years, increased investment in sales coverage, and the adoption of fixed-fee pricing for implementations. Morgan Stanley says these moves have materially reduced customer friction and shortened timelines for customers to reach production.
Against that backdrop, the firm projects a modest 1% to 2% upside to consensus revenue estimates through fiscal 2028, viewing the company’s conservative second-half guidance as a temporary disconnect from underlying demand. Channel checks cited by Morgan Stanley indicate that early adopters of Manhattan’s Wave, Labor, and Dock AI agents are reporting approximately 20% reductions in labor costs alongside meaningful productivity improvements.
Morgan Stanley expects these agent-driven efficiency gains could raise the share of agent-related revenue to roughly 25%–30% of base contract values over time, if adoption continues. To reflect this opportunity, the analyst team changed its valuation reference to CY29 EV/EBITDA and argues accelerating cloud migration will push total revenue growth from mid-to-high single digits at present into the low-to-mid double digits as cloud subscriptions scale to over 20% growth.
Under Morgan Stanley’s view, a CY29 multiple of 19x EV/EBITDA makes the shares an attractive entry at current levels, supporting a cited 4:1 risk-reward ratio and positioning Manhattan Associates as a clearer vertical-software beneficiary amid the AI transition.
Market context note: The firm’s upgrade and higher target reflect a combination of sales execution changes, pricing strategy adjustments, and early AI-derived ROI reported by customers. Morgan Stanley frames near-term conservatism in guidance as a temporary variance versus a re-acceleration in cloud subscription trends.
Price snapshot included in the source material: 204.89 ▼ -1.89 (-0.91%) Closed · 09/10 · USD 212.99 ▲ +8.10 (+3.95%) Pre Market · 08:51:58