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On Wednesday, JPMorgan analysts made adjustments to Informatica’s stock (NYSE:INFA), downgrading it from Overweight to Neutral while simultaneously increasing the price target to $25.00, up from the previous $24.00. This change comes in the wake of Informatica’s announcement on Tuesday that it has agreed to be acquired by Salesforce (NYSE:CRM). The deal, valued at $8 billion minus Salesforce’s existing investment in Informatica, translates to a purchase price of $25 per share. The news sparked a remarkable 25.8% surge in Informatica’s stock over the past week, with the company currently maintaining a GOOD financial health score according to InvestingPro data.[Get exclusive access to 16 additional ProTips and comprehensive analysis for Informatica through InvestingPro]
The acquisition will be financed through a mix of Salesforce’s available cash and new debt. The boards of directors of both Salesforce and Informatica have given their approval for the transaction, which is slated for completion in the early part of Salesforce’s fiscal year 2027, corresponding to early calendar year 2026. Notably, Informatica boasts impressive gross profit margins of 80.5% and has achieved a perfect Piotroski Score of 9, indicating strong financial fundamentals.
Informatica’s current net debt stands at $553 million. The acquisition values the company at an enterprise value (EV) to forward twelve months (FTM) revenue multiple of approximately 5 times, and an EV/FTM unlevered free cash flow (uFCF) multiple of around 14 times, as estimated by JPMorgan.
JPMorgan’s new price target is based on the agreed-upon transaction price. The report also highlights a termination fee clause within the agreement, which stipulates that either Salesforce or Informatica must pay a fee should the deal fall through.
In other recent news, Salesforce has announced a definitive agreement to acquire Informatica for approximately $8 billion, with the transaction expected to close in early fiscal 2027. Informatica shareholders are set to receive $25 per share, marking a 33% premium over the stock’s price prior to acquisition rumors. Guggenheim has reiterated a Buy rating for Informatica with a $27 price target, acknowledging the strategic fit with Salesforce’s offerings, despite potential integration challenges. Meanwhile, Wolfe Research downgraded Informatica from Outperform to Peer Perform, citing the acquisition’s reflection in the current stock price and limited potential for further appreciation.
Salesforce’s acquisition strategy continues to receive positive feedback, with TD Cowen maintaining a Buy rating and a $375 price target, highlighting the cost-effectiveness and strategic alignment of recent acquisitions. Raymond (NSE:RYMD) James also reaffirmed a Strong Buy rating for Salesforce, emphasizing the financial and strategic benefits of the Informatica acquisition, including enhanced data management capabilities and potential synergies. Analysts from William Blair have maintained an Outperform rating for Salesforce, noting the acquisition’s role in expanding Salesforce’s data management domain.
Despite some concerns over integration, the acquisition is expected to be accretive to Salesforce’s financial metrics by the second year post-closing, according to Raymond James. Salesforce plans to finance the deal through a mix of existing cash reserves and new debt, aligning with its strategic objectives in the AI and data management sectors. These recent developments underscore the evolving landscape for both Salesforce and Informatica as they navigate this significant acquisition.
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