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On Tuesday, Truist Securities maintained its Buy rating and $400.00 price target for Salesforce.com shares (NYSE:CRM), currently trading at $275.34, following comments from the company’s Chief Operating and Financial Officer, Robin Washington, regarding its acquisition strategy. As a prominent player in the Software (ETR:SOWGn) industry with a market capitalization of $264.4 billion, Salesforce shows strong potential according to InvestingPro analysis, which indicates the stock is currently undervalued. Washington highlighted Informatica as a transformative asset for Salesforce, expected to enhance customer success and Salesforce’s artificial intelligence capabilities.
Salesforce aims to rapidly integrate Informatica into its platform to realize synergies and bolster its offerings in various industry verticals, including the Public Sector, Life Sciences, Healthcare, and Financial Services. The company, which maintains impressive gross profit margins of 77.19% and generates $37.9 billion in annual revenue, plans to invest in Informatica’s data and infrastructure partner ecosystem, leveraging Salesforce’s marketing and distribution networks to quicken the growth of Informatica’s cloud business. For deeper insights into Salesforce’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and 8 additional ProTips.
Analysts had predicted low double-digit subscription revenue growth for Informatica in the coming years, slightly higher than Salesforce’s own forecasts. Salesforce’s strategy is to not only grow Informatica’s business but also to achieve revenue synergies that could significantly enhance overall performance.
The acquisition is set to be finalized in FY27, with Salesforce planning to fund the deal through cash reserves and new debt. Operating with a moderate level of debt and maintaining a healthy current ratio of 1.06, Salesforce anticipates that the transaction will contribute positively to its non-GAAP operating margin, earnings per share (EPS), and free cash flow from the second year following the deal’s closure. The company also expects to realize substantial cost synergies and a boost in revenue, without disrupting its current capital return program. With analyst targets ranging from $243 to $442, investors can access detailed valuation metrics and comprehensive analysis through InvestingPro’s exclusive research reports.
In other recent news, Salesforce has been making headlines with various developments. Notably, the company recently acquired Informatica to enhance its data management capabilities, which is expected to be accretive to non-GAAP earnings in the second year post-completion. Analysts at Evercore ISI maintain an Outperform rating with a $350 target, highlighting the strategic alignment with Salesforce’s Agentforce strategy. Meanwhile, BMO Capital Markets adjusted its price target for Salesforce to $350 from $367, maintaining an Outperform rating and expressing cautious optimism ahead of the company’s earnings report. Goldman Sachs also reiterated its Buy rating with a $340 target, projecting a 7% revenue increase and a 10% rise in current remaining performance obligations for the upcoming fiscal year. Stifel analysts upheld their Buy rating and $375 target, emphasizing the significance of the Agentforce World Tour and recent pricing updates. Additionally, Salesforce has partnered with the U.S. General Services Administration to offer significant discounts on Slack for federal agencies, aiming to enhance government productivity. These developments underscore Salesforce’s strategic initiatives and ongoing efforts to strengthen its market position.
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