Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Thursday, Canaccord Genuity revised its price target for Salesforce.com (NYSE:CRM) shares, reducing it from $415.00 to $400.00, while still recommending a Buy rating for the stock. The adjustment follows Salesforce’s guidance for the fiscal year 2026, which came in below market expectations. Currently trading at $307.33, Salesforce boasts a perfect Piotroski Score of 9, indicating strong financial health according to InvestingPro data. Despite this, the stock’s modest decline suggests to analysts that it may be approaching a level of valuation support.
Salesforce’s recent share price drop has brought its valuation to approximately 19 times enterprise value to free cash flow (EV/FCF) based on calendar year 2026 estimates. With impressive gross profit margins of 77% and strong levered free cash flow of $11.9 billion over the last twelve months, Canaccord Genuity views this as an attractive entry point for investors. Analysts believe Salesforce has the potential to reaccelerate its growth to low double digits in the coming years and remains a consistent cash flow generator. The firm anticipates that Salesforce will return a significant portion of its cash to shareholders through buybacks and dividends, with a current dividend yield of 0.52%.
Canaccord Genuity’s stance on Salesforce is underpinned by the belief that the company represents the best value play in their coverage, particularly with its growth prospects tied to artificial intelligence (AI). Despite the reduced guidance for fiscal 2026, the firm’s conviction in Salesforce’s market position remains unshaken.
The price target reduction comes in the wake of Salesforce’s financial update, which did not deter Canaccord Genuity’s positive outlook. The firm has previously identified Salesforce as a top value pick, and recent developments have not altered that perspective.
Investors looking at the long-term picture for Salesforce may find reassurance in Canaccord Genuity’s assessment, which suggests a potential for growth and value amidst the current market dynamics. The firm’s analysts continue to endorse Salesforce as a solid investment, especially for those focused on AI and consistent cash returns. For deeper insights into Salesforce’s valuation and growth prospects, InvestingPro offers comprehensive analysis with 12 additional ProTips and a detailed Pro Research Report, helping investors make more informed decisions about this prominent software industry player.
In other recent news, Salesforce has reported its fourth-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $2.78, compared to the forecasted $2.61. However, the company’s revenue of $10 billion fell short of the anticipated $10.4 billion. Despite this revenue miss, Salesforce’s full-year revenue grew by 9% year-over-year, reaching $37.9 billion. The company also highlighted a significant increase in its operating cash flow, up 28% year-over-year to $13.1 billion, and an improved non-GAAP operating margin of 33%.
Additionally, Salesforce launched its new AI-powered platform, AgentForce, contributing to the company’s innovative growth. For fiscal year 2026, Salesforce projects revenue growth between 7-8%, with expected figures ranging from $40.5 billion to $40.9 billion. Analyst Brian Peterson from Raymond (NSE:RYMD) James adjusted the price target for Salesforce shares, lowering it to $375 from $425, while maintaining a Strong Buy rating. Peterson emphasized the potential for Salesforce to exceed its initial growth guidance due to its consistent performance and expanding profit margins.
Peterson noted Salesforce’s market leadership and successful AI integration as attractive investment factors, despite a mixed quarter that sparked debate among investors. The analyst also pointed out management’s comments on market stabilization in the U.S. and consistent sales hiring plans as positive indicators for future demand. These recent developments reflect Salesforce’s ongoing efforts to navigate short-term challenges while focusing on long-term growth opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.