Joseph K
4 big analyst cuts: Salesforce near-term catalysts 'in rear-view mirror'
Morgan Stanley downgraded Salesforce (NYSE:CRM) to Equalweight from Overweight with a price target of $278.00 (from $251.00), as reported in real time on InvestingPro.
While confident in Salesforce's longer-term opportunity to further penetrate large enterprises with more vertically oriented solutions, near-term catalysts, including margin expansion and price increases, are now in rear-view mirror.
The bank mentioned that generative AI could potentially serve as the next catalyst for a higher Salesforce rating in the future. However, they do not foresee this happening in the short term due to limited access to its Unlimited Edition tiers in Sales and Service Clouds, as well as uncertainty surrounding "access, capabilities and pricing of consumption credits (which are expected to be the more significant driver on GenAI-related growth vs. seatbased uplifts)."
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