A survey from Oppenheimer indicated that growth prospects for cloud-based software company Salesforce (NYSE: CRM) remained uncertain. Top-rated Oppenheimer analyst Brian Schwartz‘s survey of 38 customers at the Dreamforce conference revealed varying outlooks on 2024 IT spending.
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The analyst noted that CRM’s customers were uncertain about their IT spend and this could prove to be a headwind for the company’s sales as “drivers for reaccelerating top-line growth are hard to find.” Schwartz added that while the Street is expecting CRM to grow between 10% and 11% in FY 2025, this growth may be achievable, but it won’t be easy.
The analyst stated, “Customers interviewed at Dreamforce expect a less seasonal 4Q IT budget flush, but are more optimistic about 2024 IT budget growth plans.”
While seen as a medium-term initiative, Schwartz believes that generative AI won’t provide an immediate boost. The analyst reiterated a Buy rating and a price target of $250 on the stock, citing low expectations and the company’s stabilizing sales organization, international presence, and long-term growth outlook. The analyst’s price target implies an upside potential of 23.6% at current levels.
Is CRM Stock a Good Buy Now?
Analysts are cautiously optimistic about CRM stock with a Moderate Buy consensus rating based on 24 Buys, 11 Holds, and one Sell.
