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On Tuesday, UBS analyst Karl Keirstead revised the price target for Salesforce (NYSE:CRM) shares to $300 from the previous target of $320, while keeping a Neutral stance on the stock. Currently trading at $275.22, Salesforce commands a market capitalization of $264 billion and maintains impressive gross profit margins of 77%. Keirstead’s assessment came after attending Salesforce’s World Tour event in New York City the previous Wednesday, where the company showcased its Agentforce and Data Cloud services. Despite these being high-growth areas, the analyst noted that the adoption of Agentforce is still in the early stages. According to InvestingPro analysis, Salesforce remains a prominent player in the Software (ETR:SOWGn) industry with substantial growth potential.
Keirstead also referenced a media report from the past Friday that hinted at Salesforce’s potential renewed interest in acquiring Informatica. In his analysis, Keirstead provided initial thoughts on the possible bid, considering the implications for Salesforce’s market strategy and financials. The company currently generates annual revenue of $37.9 billion and maintains a healthy financial position, operating with moderate debt levels.
The UBS analyst pointed out that Salesforce’s stock is currently trading at a multiple of 16 times the estimated free cash flow (FCF) for calendar year 2026/fiscal year 2027, which is at the lower end of the valuation range when compared to its peers. Keirstead suggested that while the challenging macroeconomic environment might impact Salesforce’s short-term growth, the risk to the downside appears to be limited.
The reduction in the price target to $300 is a reflection of the potential risks associated with mergers and acquisitions (M&A) execution. Keirstead justified the new target by applying an 18x multiple to his free cash flow estimates for CY26/FY27, which remains below the average for Salesforce’s competitors. Despite the adjustment, the analyst’s neutral rating indicates a wait-and-see approach to the company’s performance in the face of these developments.
In other recent news, Salesforce has been actively engaging with analysts and investors regarding its strategic initiatives and financial outlook. The company recently announced its acquisition of Informatica, a move expected to enhance Salesforce’s data management capabilities and contribute positively to its non-GAAP operating margin and earnings per share from the second year after the deal’s closure. Truist Securities maintained a Buy rating with a $400 price target, emphasizing the transformative potential of this acquisition. Meanwhile, Evercore ISI also upheld an Outperform rating with a $350 target, noting the acquisition’s alignment with Salesforce’s broader strategy.
BMO Capital Markets adjusted its price target for Salesforce to $350 from $367, maintaining an Outperform rating despite expressing some caution ahead of Salesforce’s earnings report. Goldman Sachs 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 also maintained a Buy rating and a $375 target, highlighting recent product updates showcased during the Agentforce World Tour in New York City.
Salesforce’s focus on integrating Informatica and enhancing its offerings in regulated industries like Financial Services and Healthcare is seen as a strategic move to solidify its market position. As the company prepares for its upcoming earnings report, analysts are closely monitoring its performance and integration strategies. The ongoing developments reflect Salesforce’s commitment to leveraging strategic acquisitions and product enhancements to drive future growth.
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