Derrick Wood, an analyst from TD Cowen, maintained the Buy rating on Salesforce. The associated price target was lowered to $335.00.
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Derrick Wood has given his Buy rating due to a combination of factors influencing Salesforce’s current and future performance. Despite some challenges in the enterprise sector, such as a weaker renewal business and cautious partner feedback on new deals, there are positive signs in the commercial segment. The commercial checks showed improvement, with a significant percentage of partners meeting or exceeding targets and expecting pipeline growth. Additionally, Salesforce’s Data Cloud continues to show strength, and there is a growing interest in Agentforce, even though its revenue conversion remains modest.
Furthermore, Salesforce’s focus on the mid-market is yielding positive results, as evidenced by increased sales hiring and capacity. While the near-term revenue growth may be limited, the potential for a significant uptick in AI ARR adoption in the fourth quarter could serve as a catalyst for the stock. With these factors in mind, Wood maintains a Buy rating, anticipating that Salesforce’s shares may remain stable until the expected seasonal boost in the fourth quarter.
In another report released yesterday, Citizens JMP also reiterated a Buy rating on the stock with a $430.00 price target.