Morgan Stanley upgraded ServiceTitan (TTAN) to Overweight from Equal-weight, calling the software stock its top pick on valuation. The firm lifted its price target to $131 from $125, noting the company trades at a more than 25% discount to peers when adjusted for growth.

Analysts cite improving fundamentals, stronger execution, and easing earlier concerns about the company's expansion into commercial markets. Morgan Stanley now sees ServiceTitan's growth and margin expansion as durable, justifying a higher valuation despite its history as a well-run but fairly valued firm.

The broker flagged a potential near-term catalyst from a strong fourth-quarter performance. It also suggested fiscal 2027 guidance could beat consensus, creating an uncommon but attractive setup for software stocks. The firm's view has shifted materially since it initiated coverage a year ago.