Salesforce.com price target lowered to $335 by TD Cowen on mixed demand signals

Investing.com - TD Cowen has reduced its price target on salesforce.com (NYSE:CRM) to $335.00 from $375.00 while maintaining a Buy rating ahead of the company’s second-quarter earnings report. According to InvestingPro data, the stock currently trades at $246.45, with analyst targets ranging from $225 to $440, suggesting significant potential upside despite current market dynamics.

The firm’s analysis indicates a downturn in enterprise checks, which appears to be affected by weak renewal business in that segment. This contrasts with improved commercial checks, suggesting that salesforce.com’s renewed investments in down-market segments are yielding positive results. The company maintains impressive gross profit margins of 77.3% and has achieved revenue growth of nearly 8% over the last twelve months.

Data Cloud remains a bright spot in the company’s portfolio, according to TD Cowen’s assessment. The firm notes that commitments to Agentforce, the company’s AI assistant offering, continue to be measured rather than robust.

TD Cowen expects salesforce.com shares to likely remain rangebound until the fourth quarter, which is traditionally a seasonally strong period for the company. The stock’s performance may depend on visibility into improvement during this upcoming period.

Salesforce.com is scheduled to report its second-quarter financial results on September 3, which will provide further clarity on these mixed demand signals across different market segments.

In other recent news, Salesforce is drawing attention with several developments. The company is reportedly planning a significant investment, alongside ServiceNow (NYSE:NOW), in Genesys Cloud Services Inc., with each investing approximately $750 million. This joint investment, valued at around $1.5 billion, marks a unique collaboration between competing enterprise software firms. Meanwhile, Salesforce’s fiscal second-quarter earnings report has prompted varied analyst reactions. Citizens JMP has reiterated a Market Outperform rating with a $430 price target, highlighting positive data points in Salesforce’s business. On the other hand, Stifel has adjusted its price target from $375 to $325, maintaining a Buy rating but citing concerns over multiple compression. These mixed analyst perspectives underscore differing views on Salesforce’s future performance. These recent developments provide investors with crucial insights into Salesforce’s strategic moves and market perception.

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