Piper Sandler upgrades Salesforce; cites favorable risk-reward basis

Piper Sandler has turned more positive on Salesforce (NYSE:CRM ), citing a favorable risk-reward basis for the software company.

Piper Sandler has upgraded its investment stance on Salesforce to “overweight” from “neutral”, noting the potential for free cashflow per share to double to $20 by 2029 from $9.65 in 2024, even if top-line growth remains at subdued levels of 8-9%. 

“Relative to large-cap software peers, Salesforce also has the lowest valuation multiple on an EV/S, EV/FCF, and P/E basis,” analysts at Piper Sandler said in a note, dated Sept. 24.

“Discussions last week with the leadership team, partners, and customers give us confidence that new pricing and packaging could broaden multi-cloud adoption,” the bank added, “while the promise of Agentforce powered by the Atlas (NYSE:ATCO ) Reasoning Engine paired with Data Cloud could help stabilize demand and/or drive a recovery entering 2026.”

As a result, Piper Sandler raises its estimates and price target to $325 from $268 using a target EV/FCF of 23x (vs. 22x prior) and 14% discount rate (16% prior).

Salesforce stock closed Monday at $264.21.  

 

Source: Investing.com