Needham upgraded Salesforce to Buy from Hold with a $230 price target. The company’s FY24 profitability guidance better aligns its cost structure with its intermediate term growth outlook, the analyst tells investors in a research note. The firm adds that its long time neutral stance on Salesforce had been about the lack of efficiencies driving poor margins and lower than expected free cash flow growth given the company’s decelerating revenue growth, but its initial FY24 outlook for 27% operating margin guidance implies 450bps of leverage and the initial Q1 of 2024 guidance of 30% suggests another 300bps in FY25.
Published first on TheFly
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