Salesforce (CRM – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Bradley Sills from Bank of America Securities maintained a Buy rating on the stock and has a $350.00 price target.
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Bradley Sills has given his Buy rating due to a combination of factors surrounding Salesforce’s strategic acquisition of Informatica. The deal, valued at $8 billion, is seen as a reasonable investment at 5x Informatica’s trailing twelve months revenue, which is below the historical average. This acquisition is expected to enhance Salesforce’s data capabilities, particularly through the integration of Informatica’s Intelligent Data Management Cloud, which will support Salesforce’s Agentforce by providing a more unified data infrastructure.
Additionally, the acquisition is anticipated to be accretive to Salesforce’s non-GAAP operating margin and free cash flow starting in the second year post-closing. The potential for cost synergies and revenue growth, combined with the similar profitability profiles of Salesforce and Informatica, suggests that the deal could become accretive even sooner. These factors, along with the strategic fit of Informatica’s offerings with Salesforce’s existing products, underpin Sills’s confidence in maintaining a Buy rating with a price objective of $350.
In another report released yesterday, BMO Capital also maintained a Buy rating on the stock with a $350.00 price target.
Based on the recent corporate insider activity of 233 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CRM in relation to earlier this year.