Key Takeaways
- JPMorgan launched coverage of Salesforce (CRM) with an Overweight rating and $250 price target, dismissing AI disruption concerns as exaggerated
- Shares opened at $193.20, declining 2.1% and trading significantly below the 52-week peak of $269.11
- Most recent quarterly results showed Salesforce delivered $11.13B in revenue with EPS of $3.88, surpassing the $3.13 forecast
- Institutional holdings represent 80.43% of outstanding shares; short positions decreased 36.7% in late July
- Wall Street maintains a “Moderate Buy” rating with a consensus price target of $250.28
On August 13, JPMorgan began tracking Salesforce (CRM) with an Overweight designation, establishing a December 2027 price objective of $250. Samik Chatterjee, the analyst covering the stock, argued that investor concerns surrounding the company are exaggerated and that current valuation reflects expectations for continued growth slowdown instead of acknowledging movement toward Salesforce’s Rule of 50 objective set for fiscal year 2030.
Shares of CRM started trading Thursday at $193.20, representing a decline of approximately 2.1% for the session. The equity remains substantially below its 52-week peak of $269.11 while staying above the low point of $146.32. The 50-day moving average stands at $170.96, with the 200-day average positioned at $182.38.
Chatterjee from JPMorgan projects momentum building in Salesforce’s primary operations during the latter portion of fiscal 2027, concluding in January 2027. He emphasized that anxieties regarding disruption from advanced AI models and competitive pressures “should be contained to a minor segment of operations.”
The investment bank highlighted valuation metrics as well, characterizing the stock as “attractively priced” considering its low double-digit revenue expansion, industry-leading profit margins, and dominant standing in enterprise customer relationship management. According to JPMorgan, appreciation potential exists even without revenue acceleration, supported solely by consistent growth rates and margin performance.
Strong Quarterly Performance, Future Guidance Under Scrutiny
Salesforce released Q1 FY2027 financial data on May 27. Revenue reached $11.13 billion, representing a 13.3% year-over-year increase and exceeding the $11.05 billion analyst estimate. Earnings per share of $3.88 surpassed expectations of $3.13 by $0.75.
Management issued guidance for FY2027 EPS ranging from $14.06 to $14.12, alongside Q2 EPS projections of $3.25 to $3.27. The analyst community anticipates full-year EPS averaging $10.27.
Additionally, Salesforce distributes a quarterly dividend of $0.44 per share, equating to an annualized payout of $1.76 and yielding approximately 0.9%.
Mixed Sentiment Among Analysts
JPMorgan’s bullish stance doesn’t represent universal sentiment. UBS elevated its price objective from $185 to $210 while maintaining a neutral stance, noting that Salesforce might moderate expectations regarding revenue acceleration in the second half. Wells Fargo increased its target from $200 to $205, also preserving an equal-weight rating.
Sanford C. Bernstein reduced its target from $194 to $173 with an underperform designation. BMO Capital adjusted its target downward from $225 to $215 but retained an outperform rating. BTIG sustained a buy recommendation with a $255 objective.
Wall Street Zen moved CRM from buy to hold status on August 1. Weiss Ratings downgraded the stock to sell during late July.
In aggregate, MarketBeat data shows the stock carries a “Moderate Buy” consensus rating, with an average price objective of $250.28. This rating comprises two strong buy recommendations, 25 buy ratings, 16 hold positions, and four sell calls.
Among institutional investors, Wealthcare Advisory Partners expanded its position by 36.7% during Q2, acquiring 4,664 additional shares to reach a total of 17,364 units valued at approximately $2.72 million. Institutional ownership overall accounts for 80.43% of the company.
Short interest in CRM dropped 36.7% during the latter half of July to 29.4 million shares, alleviating some bearish pressure that had accumulated against the stock.
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