01:02 PM EST, 01/17/2025 (MT Newswires) -- Clearwater Analytics' ( CWAN ) purchase of Enfusion ( ENFN ) is a major step in creating a comprehensive "front-to-back" investment management software provider, Morgan Stanley said in a note Friday.

Management's projected synergy targets do not fully reflect higher gross margins or revenue synergies, which could generate mid-single-digit earnings per share accretion in 2026 and potentially low-double-digit accretion in 2027, the investment firm said.

By integrating Enfusion's ( ENFN ) front-office capabilities, Clearwater Analytics ( CWAN ) aims to serve more hedge funds, asset managers, and insurance clients at scale, Morgan Stanley said.

There is a sizable cross-selling opportunity among Clearwater Analytics' ( CWAN ) 200 asset management clients and 600 insurance customers, which could further support EPS, the analysts at Morgan Stanley noted.

Concerns include integrating Enfusion's ( ENFN ) technology for larger clients and scaling the platform for mega-cap accounts, the note added.

Morgan Stanley upgraded Clearwater to overweight from equalweight and raised price target to $34 from $30. Shares were up about 4% in recent trading.

Price: 28.07, Change: +0.98, Percent Change: +3.62