Salesforce Price Target Lowered at Citi, Here’s Why

  • Salesforce Inc. (CRM) shares fell more than 1% in early trading after Citigroup (C) cut its price target to $320 from $335, citing mixed demand signals ahead of the Q1 earnings report on May 28.
  • Citi analysts expect Salesforce’s revenue growth to remain in the high-single-digit range in the near term, despite a weaker U.S. dollar potentially aiding reported results.
  • The $272 billion market cap company faces challenges from cautious corporate spending, though its focus on AI-driven solutions like Einstein could support long-term growth.

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Salesforce Inc. (CRM) shares slipped 1.40% to $279.48 in early trading on Friday, reflecting investor caution after Citigroup (C) revised its price target for the $272 billion market cap company to $320 from $335, while maintaining a ‘Neutral’ rating. The downgrade comes ahead of Salesforce’s Q1 earnings report scheduled for May 28, with Citi’s partner checks indicating mixed signals on demand for the cloud-based software provider’s services. Despite a weaker U.S. dollar since February potentially boosting as-reported results, Citi analysts expect Salesforce’s revenue growth to remain in the high-single-digit range in the near term, signaling persistent challenges in achieving robust expansion.

The broader context of Salesforce’s performance highlights its position as a leader in customer relationship management software, navigating a competitive landscape marked by evolving enterprise needs and macroeconomic pressures. The company’s recent focus on AI-driven solutions, such as its Einstein platform, aims to enhance client productivity, but adoption rates and deal cycles appear uneven based on Citi’s findings. Salesforce’s $272 billion market cap underscores its significant scale, yet the constrained growth outlook suggests headwinds from cautious corporate spending and potential saturation in key markets. Citi’s Neutral stance reflects a balanced view, acknowledging Salesforce’s strong fundamentals but tempering expectations for rapid revenue acceleration.

Meanwhile, Citigroup, which issued the price target cut, saw its own shares trading at $72.63, down slightly from the previous close of $73.42. The bank’s analysis points to broader market dynamics, where currency fluctuations and economic uncertainty influence corporate tech investments. As Salesforce approaches its Q1 report, investors will scrutinize metrics like subscription revenue and guidance for clues on demand trends. Despite the near-term caution, Salesforce’s long-term growth potential remains tied to its ability to capitalize on digital transformation and AI innovation, positioning it to navigate current market complexities.

WallStreetPit does not provide investment advice. All rights reserved.

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