TECH - Salesforce Stock Tumbled But Many Analysts Maintain Long Term Optimism Despite Q1 Setback Eye AI Growth | Benzinga
Salesforce Inc (NYSE:CRM) shares are trading lower Thursday after multiple analysts slashed their price targets following the first-quarter print.
Salesforce reported first-quarter revenue of $9.13 billion, missing the analyst consensus of $9.15 billion. The adjusted EPS of $2.44 beat the analyst consensus of $2.38.
BofA Securities analyst Brad Sills reiterated a Buy rating and cut his price target from $360 to $288 on the demand environment reversion.
The analyst attributed the performance to the quarter’s weakening buying environment that the application companies faced after the short-lived fourth-quarter strength.
He acknowledged limited visibility on an improving software spending environment, casting doubt on second-quarter growth prospects.
Stifel analyst J. Parker Lane maintained a Buy with a price target of $300, down from $350.
Lane said various headwinds outweighed green shoots in Data Cloud, Industry Cloud, public sector, and financial services this quarter as the company noted a demand environment similar to the past two years.
While the macro’s current effect on the group is undoubted, the analyst continues to see Salesforce as a clear generative AI beneficiary over the coming years.
Truist Securities analyst Terry Tillman reiterated a Buy with a price target of $300, down from $360.
Salesforce had a mixed quarter. The company noted a continuation of measured buying behavior leading to longer deal cycles and deal compression but reiterated that it is seeing favorable trends with key growth levers like Data Cloud, multi-cloud adoption, and the Industry Clouds.
Tillman recommends buying on weakness as the profit improvement and capital allocation story is firmly intact.
The analyst added that Data Cloud, Industry Solutions, MuleSoft, and AI drivers could help subscription revenue and cRPO growth inflect going forward, especially in the seasonally stronger second half and amid any improved macro backdrop.
BMO Capital analyst Keith Bachman remained Outperform with a price target of $265, down from $335.
The quarter was disappointing, and the lowered revenue guidance left some risk, given the poor execution and buying environment witnessed in the first quarter.
Wedbush analyst Daniel Ives maintained an Outperform with a price target of $315, down from $325.
As per Ives, Salesforce is ...