On Tuesday, DA Davidson has adjusted its outlook on Salesforce.com Inc. (NYSE:CRM), increasing the price target to $300 from the previous $250 while maintaining a Neutral rating on the stock. Currently trading at $331.01, near its 52-week high of $348.86, Salesforce boasts a market capitalization of $316.45 billion.
The firm's analyst cited the recent Agentforce Seattle event as a significant moment for Salesforce, acknowledging its sustained leadership in the CRM market space. According to InvestingPro analysis, the company maintains impressive gross profit margins of 76.35%. Despite this, the firm has revised down its financial projections for Salesforce's Fiscal Year 2026.
The analyst noted that while Agentforce represented a substantial shift for Salesforce, particularly with the integration of AI, they are not convinced it will drastically change the growth trajectory of the company. Consequently, the firm remains cautious about fully endorsing a major growth alteration due to AI contributions at this stage.
The firm expressed optimism about Salesforce's potential to surpass its Fiscal Year 2026 earnings per share estimates if the company continues to grow at the current rate. This positive outlook has informed the decision to increase the price target. The new target is based on a 27x P/E multiple for FY26.
Salesforce.com, a major player in the customer relationship management (CRM) software industry, has been closely watched by investors for signs of growth and innovation, especially in the realm of artificial intelligence. The Agentforce event is a key indicator of the company's strategic direction and its potential impact on future performance.
The revised price target of $300 reflects a careful balance between recognition of Salesforce's market position and the uncertainties surrounding the financial impact of its AI initiatives. As of now, DA Davidson's stance remains one of watchful neutrality, with a keen eye on Salesforce's performance in the coming years.
In other recent news, Salesforce's earnings and revenue have been highlighted due to their strong performance. The company reported a 7% year-over-year growth in revenues, totaling $9.3 billion, and an earnings per share (EPS) of $2.45, as projected by CFRA. The firm also anticipates future revenues to align closely with the consensus of $10 billion and an EPS of $2.65.
Salesforce has been active in mergers and acquisitions, having acquired Zoomin and Own Company for $1.9 billion in cash. The company also announced plans to hire 1,000 new employees to support Agentforce sales.
Several analysts have recently adjusted their outlook on Salesforce. CFRA increased its 12-month price target from $343.00 to $380.00, maintaining a strong buy rating. Piper Sandler upgraded Salesforce's stock to Overweight and increased the price target by $70. Morgan Stanley (NYSE:MS) maintained an Overweight rating, while Truist Securities increased the price target for Salesforce, maintaining a Buy rating. However, TD Cowen retained a Hold rating on the stock.
These recent developments highlight Salesforce's growth and diversification strategies, including the increased adoption of Agentforce and the expansion of Data Cloud. The company's strong second-quarter earnings, increased sales, and rise in subscription and support revenues underline its financial health.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.