Salesforce initiated with a Sector Weight at KeyBanc

KeyBanc analyst Jackson Ader initiated coverage of Salesforce with a Sector Weight rating and no price target, down from the firm’s previous rating on the stock. While noting that the firm’s estimates are above consensus on “a few metrics in the near term” and giving the company credit for “living under a totally new operating regime,” the firm thinks that to be more bullish investors are going to have to assume that incremental margins will sustainably be “some of the best in software,” the data cloud can remain in hypergrowth for the next several years, that the buyback authorization is drained in the next 18-24 months, and that the multiple will expand. “At the moment, we are happy to wait and see,” the analyst added.