Key Takeaways
- Salesforce shares tumbled after the company reported first-quarter sales that missed estimates and offered weaker-than-expected guidance for the second quarter, leading analysts to lower their price objectives for the stock.
- Analysts at Bank of America, Jefferies, CFRA, and Wedbush dropped their price targets after Salesforce’s earnings release.
- However, several maintained “buy” ratings, and noted that Salesforce could benefit longterm from enterprise customers’ AI plans.
Salesforce (CRM) shares extended their earnings-fueled decline in intraday trading Thursday after the customer relationship management (CRM) company reported first-quarter sales that missed estimates and offered weaker-than-expected guidance for the second quarter. Analysts lowered their price targets for Salesforce stock following the lackluster earnings report, though several maintained “buy” ratings, noting Salesforce could benefit from enterprise customers integrating artificial intelligence (AI).
Salesforce shares were down about 21% at $214.27 as of 3 p.m. ET Thursday, contributing to the stock’s more than 18% fall since the start of 2024.
Lowering Price Targets Amid Growth Concerns
Analysts at Bank of America, Jefferies, and CFRA all lowered their price targets for Salesforce stock, citing concerns about slowing growth amid a challenging macro environment.
Bank of America analysts dropped their price target to $288 from $360, pointing to a “tough demand environment” for Salesforce’s results.
CFRA analysts set their price objective at $300, lowering it from $330, saying that the second quarter guidance “implies sales growth decelerating to 7%-8% (full-year stays 8%-9%), the slowest pace in CRM’s history, as the buying environment remains uncertain.”
Jefferies lowered its target to $350 from $360, with the analysts saying that the “lackluster” earnings report highlighted the “volatility and the tough macro environment.”
AI Potential Highlighted
Despite lowering expectations for Salesforce’s stock price, analysts highlighted potential growth opportunities for the company, particularly with AI adoption.
Wedbush analysts, who changed their target to $315 from $325 but maintained an “outperform” rating, said that they “would be buyers on weakness” as they still view Salesforce as a favorite tech name “as the AI story starts to take shape.”
Bank of America analysts reiterated their “buy” rating on the stock, saying there are “some signs of green shoots forming” such as the company maintaining its full-year outlook despite weaker-than-expected first-quarter sales and second-quarter guidance.
CFRA analysts said “AI initiatives will take time to yield results,” but noted they view “CRM as better positioned than most enterprise firms given access to customer data.”