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On Thursday, Wolfe Research reaffirmed its optimistic stance on Salesforce.com Inc (NYSE:CRM), maintaining an Outperform rating and a price target of $310.00. Currently trading at $276.03, Salesforce has received strong backing from Wall Street analysts, with a consensus recommendation of 1.74 (Strong Buy) and price targets ranging from $200 to $442. According to InvestingPro analysis, the stock appears slightly undervalued based on its proprietary Fair Value model. The firm’s analyst, Alex Zukin, highlighted Salesforce’s solid performance in the first quarter of fiscal year 2026, noting a commendable 11% growth in constant currency remaining performance obligations (cRPO), albeit a smaller increase than in previous quarters. The company’s overall revenue reached $37.9 billion in the last twelve months, with an impressive gross profit margin of 77.19%. Salesforce achieved $1 billion in annual recurring revenue (ARR) from its Agentforce and Data Cloud services, marking a significant 120% year-over-year growth. Within this, Agentforce contributed $100 million of ARR.
Zukin drew attention to the company’s strengths in the small and medium-sized business (SMB) sector and on the AWS Marketplace, while also pointing out weaker performance in the marketing and commerce clouds. The analysis by Wolfe Research was buoyed by tangible signs of AI monetization through Salesforce’s Agentforce. In response to the company’s fiscal first-quarter results, Wolfe Research has updated its estimates to align with Salesforce’s new guidance. The firm now projects total revenue growth of 8.6% and 8.9% year-over-year for fiscal years 2026 and 2027, respectively.
Additionally, Wolfe Research anticipates free cash flow (FCF) margins of 33.2% for fiscal year 2026 and 34.5% for fiscal year 2027. The firm remains confident in Salesforce’s ability to exceed its free cash flow and earnings per share targets, particularly as the company embarks on a new product cycle centered around GenAI. This cycle is expected to introduce new products, pricing strategies, and SKU upgrades that support growth. InvestingPro data reveals strong financial health with an overall score of 2.95 (GOOD), supported by robust cash flows and moderate debt levels. For deeper insights into Salesforce’s financial health and growth prospects, including 10 key ProTips and comprehensive valuation metrics, check out the full Pro Research Report available on InvestingPro.
According to Zukin, the adoption of new products combined with sustained pricing power is likely to drive a robust top-line for Salesforce, while margins are expected to continue improving. Wolfe Research’s continued Outperform rating reflects its belief in Salesforce’s growth potential and financial strength.
In other recent news, Salesforce has reported first-quarter results that exceeded expectations, particularly in subscription and support revenue, total revenue, and current remaining performance obligations (cRPO), which saw an 11% year-over-year growth in constant currency. Analysts from Truist Securities maintained a Buy rating with a $400 price target, highlighting the company’s strong performance in high-growth segments like Data Cloud and AI, and noting robust growth in the small and mid-market business segments. Meanwhile, Baird adjusted their price target for Salesforce to $365 but maintained an Outperform rating, attributing this change to Salesforce’s positive financial report and the potential impact of newer ventures like Data Cloud and Agentforce. Stifel also reiterated a Buy rating with a $375 price target, emphasizing Salesforce’s market position in agentic artificial intelligence and its strategic plans to expand go-to-market capacity. Morgan Stanley (NYSE:MS) raised its price target to $404, underscoring Salesforce’s resilience amid market volatility and the potential of its AI capabilities, which are not yet fully reflected in the share price. KeyBanc maintained an Overweight rating with a $440 target, noting the company’s strategic adjustments and growth in current bookings. Salesforce’s recent acquisition of Informatica is expected to enhance its AI and data management capabilities, though large deals are not anticipated at this time. These developments collectively indicate a strategic shift and strong positioning for Salesforce, with analysts expressing confidence in the company’s future growth potential.
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