Salesforce (NYSE:CRM) Shares Down 3.5% After Analyst Downgrade

Key Points

• Salesforce shares fell 3.5% after Citigroup cut its price target to $188 from $200 while keeping a neutral rating. The stock traded as low as $170.58, below its prior close of $177.49.
• Other analysts have also trimmed expectations, including Morgan Stanley, Mizuho, and UBS, even though the broader consensus still stands at Moderate Buy with an average target price of $278.82.
• Despite the downgrade-driven weakness, Salesforce reported strong recent fundamentals, including quarterly EPS of $3.81 versus $3.05 expected and revenue up 12.1% year over year. The company also raised its dividend and authorized a $25 billion share repurchase program.

Salesforce Inc. (NYSE:CRM - Get Free Report) fell 3.5% during mid-day trading on Tuesday after Citigroup lowered their price target on the stock from $200.00 to $188.00. Citigroup currently has a neutral rating on the stock. Salesforce traded as low as $170.58 and last traded at $171.2790. 10,183,071 shares traded hands during mid-day trading, a decline of 21% from the average session volume of 12,910,783 shares. The stock had previously closed at $177.49.

A number of other research firms have also issued reports on CRM. Morgan Stanley reduced their price target on shares of Salesforce from $398.00 to $287.00 and set an "overweight" rating for the company in a research report on Monday, February 23rd. Mizuho reduced their price target on shares of Salesforce from $280.00 to $265.00 and set an "outperform" rating for the company in a research report on Thursday, February 26th. UBS Group reduced their price target on shares of Salesforce from $260.00 to $200.00 and set a "neutral" rating for the company in a research report on Tuesday, February 17th. BTIG Research reissued a "buy" rating and issued a $255.00 price target on shares of Salesforce in a research report on Friday, April 17th. Finally, The Goldman Sachs Group reissued a "buy" rating and issued a $281.00 price target on shares of Salesforce in a research report on Thursday, February 26th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $278.82.

Insider Activity at Salesforce

In related news, Director Laura Alber purchased 2,571 shares of the stock in a transaction on Thursday, March 19th. The shares were bought at an average price of $194.58 per share, for a total transaction of $500,265.18. Following the completion of the acquisition, the director directly owned 9,530 shares in the company, valued at approximately $1,854,347.40. This trade represents a 36.94% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director David Blair Kirk purchased 2,570 shares of the stock in a transaction on Wednesday, March 18th. The shares were bought at an average price of $194.62 per share, for a total transaction of $500,173.40. Following the acquisition, the director owned 13,689 shares of the company's stock, valued at approximately $2,664,153.18. The trade was a 23.11% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Company insiders own 3.00% of the company's stock.

More Salesforce News

Here are the key news stories impacting Salesforce this week:

• Negative Sentiment: Citigroup cut its price target on Salesforce to $188 from $200 and kept a neutral rating, signaling limited near-term upside and reinforcing a cautious view on the stock. Benzinga
• Negative Sentiment: Wells Fargo reiterated a hold rating on Salesforce, adding to the theme that analysts see the shares as fairly valued to slightly pressured in the near term. The Globe and Mail
• Neutral Sentiment: New research highlighting inefficiencies in the Salesforce delivery lifecycle may be a longer-term ecosystem concern, but it does not directly change Salesforce’s fundamentals or near-term outlook. GlobeNewswire
• Neutral Sentiment: Coverage on Salesforce’s discounted valuation, strong cash flow, and AI initiatives like Agentforce and Data 360 supports the bull case, but these pieces read more like valuation commentary than a fresh catalyst. Zacks
• Positive Sentiment: Salesforce’s strong free cash flow remains a support for shareholder returns and AI investment, which could help limit downside if growth initiatives continue to gain traction. Zacks

Hedge Funds Weigh In On Salesforce

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Commonwealth Retirement Investments LLC bought a new stake in shares of Salesforce in the fourth quarter valued at approximately $25,000. Board of the Pension Protection Fund bought a new stake in shares of Salesforce in the fourth quarter valued at approximately $26,000. Key Capital Management INC bought a new stake in shares of Salesforce in the fourth quarter valued at approximately $26,000. Gilpin Wealth Management LLC bought a new stake in shares of Salesforce in the fourth quarter valued at approximately $26,000. Finally, Legacy Bridge LLC bought a new stake in shares of Salesforce in the fourth quarter valued at approximately $27,000. Institutional investors and hedge funds own 80.43% of the company's stock.

Salesforce Stock Down 3.5%

The firm has a 50-day moving average price of $186.13 and a two-hundred day moving average price of $217.79. The company has a quick ratio of 0.76, a current ratio of 0.76 and a debt-to-equity ratio of 0.18. The company has a market capitalization of $140.14 billion, a P/E ratio of 21.93, a PEG ratio of 1.26 and a beta of 1.14.

Salesforce (NYSE:CRM - Get Free Report) last announced its quarterly earnings data on Wednesday, February 25th. The CRM provider reported $3.81 EPS for the quarter, beating analysts' consensus estimates of $3.05 by $0.76. The business had revenue of $11.20 billion during the quarter, compared to analyst estimates of $11.18 billion. Salesforce had a net margin of 17.96% and a return on equity of 15.38%. The firm's revenue for the quarter was up 12.1% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.78 earnings per share. Salesforce has set its FY 2027 guidance at 13.110-13.190 EPS and its Q1 2027 guidance at 3.110-3.130 EPS. Equities research analysts anticipate that Salesforce Inc. will post 9.71 EPS for the current fiscal year.

Salesforce Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, April 23rd. Investors of record on Thursday, April 9th were given a $0.44 dividend. This represents a $1.76 annualized dividend and a yield of 1.0%. This is an increase from Salesforce's previous quarterly dividend of $0.42. The ex-dividend date of this dividend was Thursday, April 9th. Salesforce's dividend payout ratio (DPR) is 22.54%.

Salesforce declared that its Board of Directors has approved a stock repurchase program on Monday, March 16th that permits the company to repurchase $25.00 billion in shares. This repurchase authorization permits the CRM provider to purchase up to 14.1% of its shares through open market purchases. Shares repurchase programs are typically an indication that the company's board of directors believes its shares are undervalued.

Salesforce Company Profile

Salesforce, founded in 1999 and headquartered in San Francisco, is a global provider of cloud-based software focused on customer relationship management (CRM) and enterprise applications. The company popularized the software-as-a-service (SaaS) model for CRM and has built a broad portfolio of products designed to help organizations manage sales, service, marketing, commerce and analytics through a unified, cloud-first platform.

Core offerings include Sales Cloud for sales automation, Service Cloud for customer support, Marketing Cloud for digital marketing and engagement, and Commerce Cloud for e-commerce.

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