Salesforce (NYSE:CRM) Shares Gap Up After Analyst Upgrade

Key Points

• Bank of America upgraded Salesforce to “buy” from “underperform” and raised its price target to $285 from $160, sending shares up 2.5% and opening at $236.65.
• Analyst sentiment is broadly positive: Salesforce has a consensus “Moderate Buy” rating and an average price target of $278.12, with several firms recently maintaining or raising their targets.
• Salesforce reported quarterly EPS of $5.90, well above the $3.27 consensus estimate, while revenue rose 10.8% year over year to $11.35 billion. The company also declared a quarterly dividend of $0.44 per share, yielding approximately 0.7%.

Shares of Salesforce Inc. (NYSE:CRM - Get Free Report) gapped up prior to trading on Monday after Bank of America upgraded the stock from an underperform rating to a buy rating. The stock had previously closed at $229.13, but opened at $236.65. Bank of America now has a $285.00 price target on the stock, up from their previous price target of $160.00. Salesforce shares last traded at $235.4810, with a volume of 1,977,314 shares traded.

Several other equities research analysts also recently weighed in on the company. Morgan Stanley set a $315.00 price target on Salesforce in a report on Wednesday, September 2nd. Needham & Company LLC reiterated a "buy" rating on shares of Salesforce in a research note on Thursday, September 17th. TD Cowen restated a "buy" rating on shares of Salesforce in a research note on Thursday, September 17th. Canaccord Genuity Group boosted their target price on shares of Salesforce from $270.00 to $300.00 and gave the company a "buy" rating in a research report on Thursday, September 17th. Finally, Barclays boosted their price target on Salesforce from $236.00 to $276.00 and gave the company an "overweight" rating in a report on Thursday, August 27th. Three research analysts have rated the stock with a Strong Buy rating, thirty-one have assigned a Buy rating, fourteen have issued a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $278.12.

Insider Buying and Selling

In related news, Director Craig Conway sold 4,500 shares of the business's stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $260.61, for a total transaction of $1,172,745.00. Following the completion of the sale, the director directly owned 5,437 shares in the company, valued at approximately $1,416,936.57. The trade was a 45.29% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director David Blair Kirk acquired 4,176 shares of Salesforce stock in a transaction that occurred on Friday, September 18th. The stock was purchased at an average cost of $239.33 per share, with a total value of $999,442.08. Following the completion of the purchase, the director owned 18,748 shares in the company, valued at $4,486,958.84. The trade was a 28.66% increase in their position. The SEC filing for this purchase provides additional information. Insiders own 3.50% of the company's stock.

Hedge Funds Weigh In On Salesforce

Several hedge funds and other institutional investors have recently modified their holdings of the business. ABS Direct Equity Fund LLC acquired a new position in Salesforce in the 2nd quarter valued at about $25,000. Manning & Napier Advisors LLC acquired a new stake in shares of Salesforce during the 2nd quarter worth about $26,000. Persistent Asset Partners Ltd acquired a new stake in shares of Salesforce during the 2nd quarter worth about $27,000. Costello Asset Management INC grew its holdings in shares of Salesforce by 410.3% during the first quarter. Costello Asset Management INC now owns 148 shares of the CRM provider's stock worth $28,000 after buying an additional 119 shares in the last quarter. Finally, Gables Capital Management Inc. acquired a new position in shares of Salesforce in the second quarter valued at approximately $28,000. 80.43% of the stock is owned by hedge funds and other institutional investors.

Salesforce Stock Up 2.5%

The company has a quick ratio of 0.84, a current ratio of 0.84 and a debt-to-equity ratio of 1.02. The firm has a market cap of $193.36 billion, a PE ratio of 21.42, a P/E/G ratio of 1.05 and a beta of 1.26. The firm's 50 day moving average is $226.55 and its 200-day moving average is $192.91.

Salesforce (NYSE:CRM - Get Free Report) last issued its quarterly earnings results on Wednesday, August 26th. The CRM provider reported $5.90 earnings per share for the quarter, beating the consensus estimate of $3.27 by $2.63. The company had revenue of $11.35 billion during the quarter, compared to the consensus estimate of $11.33 billion. Salesforce had a return on equity of 24.90% and a net margin of 21.99%. Salesforce's revenue was up 10.8% on a year-over-year basis. During the same period in the previous year, the firm posted $2.91 EPS. Salesforce has set its FY 2027 guidance at 16.670-16.710 EPS and its Q3 2027 guidance at 3.420-3.440 EPS. As a group, equities research analysts expect that Salesforce Inc. will post 12.82 earnings per share for the current fiscal year.

Salesforce Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, October 8th. Shareholders of record on Thursday, September 17th were paid a $0.44 dividend. This represents a $1.76 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date of this dividend was Thursday, September 17th. Salesforce's dividend payout ratio (DPR) is presently 16.04%.

Salesforce Company Profile

Salesforce, Inc NYSE: CRM develops cloud-based customer relationship management (CRM) software and enterprise applications. Its platform helps organizations manage sales, customer service, marketing, commerce, analytics, data integration and collaboration through subscription-based services.

The company's product portfolio includes Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Salesforce Platform, Data Cloud and Tableau. Salesforce also offers MuleSoft integration technology, Slack collaboration software and artificial intelligence capabilities through its Einstein platform.

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