Why Salesforce Analysts Say They’re Bullish on the Software Giant

Key Takeaways

• Analysts are optimistic after Salesforce beat expectations with its second-quarter results.
• Investors will be watching for continued margin growth and the reach of Salesforce’s new Agentforce AI platform.
• The consensus price target for Salesforce is $307, 18% higher than Wednesday’s closing price.

After Salesforce (CRM) reported better-than-expected results late Wednesday, Bank of America (BofA) Securities analysts raised their price target on the stock, citing record-high margins and the potential of its new artificial intelligence (AI) offering.

BofA upped its target to $325 from $316, calling the cloud software company “the next quality GARP,” an acronym for “growth at a reasonable price.” The bank’s analysts expect sustained low-double-digit growth moving forward, particularly if the consumer macroeconomic environment improves. 

The customer relationship management (CRM) company posted a record adjusted operating margin of 33.7% and raised its full-year guidance to 32.8%, but Jefferies analysts believe the actual figure could be even higher. The firm on Thursday reiterated its “buy” rating for Salesforce and maintained its $350 price target. 

Analysts also flagged the surprise departure of Chief Financial Officer (CFO) Amy Weaver, which was generally taken as a neutral or slightly negative development.

Agentforce AI Seen as Potential Profit Booster

Salesforce unveiled its Agentforce AI platform this quarter, which will offer autonomous enterprise CRM services starting in October. 

The new AI offering has the potential to materially increase Salesforce’s profit, analysts at Wedbush Securities said Thursday. The firm reiterated an “outperform” rating and $315 price target.

“While still battling through various headwinds in a choppy backdrop, this was a much-needed bounce back quarter with CRM making major strides in the field around monetizing AI across its massive install base while generating solid bottom-line expansion,” the analysts said. 

Shares of Salesforce were down slightly Thursday afternoon at $257.77, trading about 2% below where they started the year. By comparison, 25 brokers tracked by Visible Alpha have a consensus price target of $307, with most rating the stock a buy.

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