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On Thursday, Erste Group downgraded the stock rating for Salesforce.com (NYSE: NYSE:CRM) from Buy to Hold. The decision was influenced by anticipated lower revenue and net profit growth in the current financial year compared to the previous year. Currently trading at $263.17, Salesforce maintains impressive gross profit margins of 77.34%, though InvestingPro data shows the stock is trading at a relatively high P/E ratio of 40.7x.
According to Erste Group analysts, Salesforce maintains a strong position in customer service, marketing automation, and particularly data analysis using AI, which supports its ability to increase revenue and operating margins. While revenue growth is projected at 9% for the fiscal year 2026, this falls short of the company’s 5-year CAGR of 17%. For deeper insights into Salesforce’s growth metrics and 33 additional analyst revisions, check out the comprehensive research available on InvestingPro.
The analysts noted that Salesforce’s sales growth is trailing behind its competitors. This discrepancy has resulted in the company’s price-to-earnings ratio being below the sector average, contributing to the downgrade.
Salesforce’s leading capabilities in AI-driven data analysis and other areas continue to provide a competitive edge. However, the slower growth projections have affected its stock rating, reflecting the challenges the company faces in maintaining its market position.
In other recent news, Salesforce has been the focus of several analyst evaluations and strategic developments. Cantor Fitzgerald initiated coverage on Salesforce with an Overweight rating, setting a price target of $325. This reflects their positive outlook on the company’s growth prospects and financial performance, highlighting Salesforce’s innovation with its Agentforce platform as a key factor in maintaining its market position. Truist Securities reiterated a Buy rating with a $400 price target, expressing confidence in Salesforce’s potential to exceed fiscal year estimates, emphasizing the company’s operational leverage and traction among small and mid-sized businesses.
Stifel also maintained a Buy rating with a $375 target, focusing on Salesforce’s Data and AI business segment and the potential benefits of its impending acquisition of Informatica. This acquisition is expected to enhance Salesforce’s market position significantly. On the other hand, Stephens adjusted the price target slightly to $309 from $311, maintaining an Equal Weight rating while noting Salesforce’s strategic focus on integrating new features and enhancing customer success. Morgan Stanley (NYSE:MS) reaffirmed its Overweight rating with a $404 target, acknowledging concerns about Salesforce’s margins but highlighting the company’s commitment to investing in growth opportunities like Agentforce and Data Cloud. These developments underscore the varied but generally positive analyst outlooks on Salesforce’s future growth and strategic initiatives.
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