Piper Sandler Boosts Salesforce Rating Amid Positive Trends
Piper Sandler Upgrades Salesforce's Investment Outlook
Piper Sandler has recently taken a more favorable stance on Salesforce (NYSE: CRM), emphasizing a compelling risk-reward ratio for this prominent software provider. With a strategic upgrade of their investment rating from 'neutral' to 'overweight', the firm highlights the potential for Salesforce’s free cash flow per share to double to $20 by 2029, soaring from the current $9.65 projected for 2024, even amidst anticipated top-line growth rates of 8-9%.
Valuation Insights and Market Position
In their analysis, Piper Sandler noted that Salesforce holds the lowest valuation multiples compared to its large-cap software peers, measured across various metrics including EV/S, EV/FCF, and P/E ratios. This distinct positioning may present an attractive opportunity for investors looking for value in the software sector.
Discussions Drive Confidence
Recent discussions with Salesforce’s leadership, partners, and customers have further bolstered the analysts' confidence. They believe that the introduction of new pricing and packaging strategies may significantly enhance multi-cloud adoption among users. Additionally, Salesforce's innovative Agentforce powered by the Atlas Reasoning Engine, combined with its Data Cloud, is expected to stabilize demand and potentially catalyze a recovery into 2026.
Revised Estimates and Target Price
As a result of these positive indicators, Piper Sandler has revised its estimates and increased the price target for Salesforce shares to $325, up from a previous target of $268. This adjustment is based on a target EV/FCF multiple of 23x, slightly higher than the previous 22x, along with a revised discount rate of 14%, down from 16%.
Current Market Performance
As of the last trading day, Salesforce stock closed at $264.21. This reflects a robust market interest and confidence that may be driven further by the strategic insights provided by Piper Sandler and the anticipated performance of Salesforce moving forward.
Frequently Asked Questions
What did Piper Sandler upgrade Salesforce to?
Piper Sandler upgraded Salesforce's rating from 'neutral' to 'overweight'.
What is the new price target for Salesforce shares?
The new price target for Salesforce shares is set at $325, increased from $268.
What is the expected free cash flow per share for Salesforce by 2029?
The expected free cash flow per share for Salesforce is anticipated to reach $20 by 2029.
What strategies are believed to boost Salesforce's market position?
New pricing and packaging, along with innovations like Agentforce powered by the Atlas engine, are expected to enhance Salesforce's market position.
How did Salesforce stock perform recently?
Salesforce stock closed at $264.21 on the last trading day, indicating strong market behavior.
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