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On Friday, Stifel analysts reiterated their Buy rating and $375.00 price target on Salesforce.com (NYSE:CRM), following a detailed review of the company’s Data and AI business segment. The analysis comes in the wake of Salesforce’s recent earnings report and a product event held on Thursday. According to InvestingPro data, 33 analysts have recently revised their earnings estimates upward, with the stock currently trading at $261.82, suggesting potential upside based on Stifel’s target.
Stifel’s review focused on Salesforce’s current Data and AI offerings, which, although currently a smaller part of the company’s revenue, are seen as crucial to its long-term growth. The firm’s analysts believe that Salesforce’s future success is closely tied to the adoption and expansion of Agentic AI use-cases. The company maintains impressive gross profit margins of 77.34% and has achieved nearly 8% revenue growth over the last twelve months, reaching $38.59 billion.
The report also examined the potential benefits of Salesforce’s impending acquisition of Informatica, a cloud data management company. Stifel suggests that this acquisition will significantly enhance Salesforce’s position in the market, offering a combination that would be highly beneficial for enterprise customers. With a market capitalization of $250.29 billion and operating with moderate debt levels, Salesforce appears well-positioned for this strategic move.
Analysts at Stifel provided insights into the expected financial state of Salesforce post-acquisition, using a merger model. They emphasized that the integration of Informatica’s capabilities should strengthen Salesforce’s competitive edge in the Data and AI space.
The reiteration of the Buy rating and the $375 price target indicates Stifel’s confidence in Salesforce’s strategy and its execution in expanding its Data and AI capabilities. Salesforce’s stock continues to be monitored by investors as the company progresses with its growth initiatives and the upcoming acquisition.
In other recent news, Salesforce reported a solid first-quarter performance, with a Q1 operating margin of 32.3%, slightly under the market expectation of 32.6%. Despite this, Salesforce maintained its full-year constant currency subscription revenue growth guidance at approximately 9%. The company’s Data Cloud and artificial intelligence annual recurring revenue showed a robust year-over-year growth of 120%. Analysts have offered varied perspectives following these results. Morgan Stanley (NYSE:MS) reiterated its Overweight rating with a $404 price target, while CFRA maintained a Strong Buy rating with a $375 target, citing Salesforce’s potential to meet or exceed revenue expectations in upcoming quarters. Conversely, Citi reduced its price target to $295, maintaining a Neutral rating, and noted concerns about growth deceleration and profitability improvements. Stephens also made a slight adjustment, cutting its price target to $309, while keeping an Equal Weight rating. TD Cowen reaffirmed its Buy rating with a $375 target, highlighting Salesforce’s strategic focus on growth initiatives. These developments reflect diverse analyst opinions on Salesforce’s market positioning and future prospects.
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