Salesforce downgraded to Underperform from Market Perform at Bernstein

Bernstein analyst Mark Moerdler downgraded Salesforce to Underperform from Market Perform with a price target of $119, down from $134. The analyst notes that Salesforce has been a controversial name for the last year as growth slowed and the company started to focus on margin. Management guided to hit $50B in revenue and PF operating margins of 25%-plus for 2026. But pressure has increased for larger margin improvements, while growth has continued to slow and the company has missed expectations, Moerdler adds. Comparing the valuation of Salesforce against peers the analyst finds that Salesforce is overpriced, as it has a similar growth rate to peers but lower margins and lower quality earnings. With a lot more pain ahead for Salesforce and numerous catalysts that may drive a lower multiple, he drops his rating to Underperform.