On Thursday, TD Cowen displayed confidence in salesforce.com (NYSE: CRM) by raising the price target on the company's shares to $340 from the previous $290, while retaining a Hold rating on the stock. The adjustment comes ahead of the company's third-quarter earnings report, scheduled for December 3.
The analyst at TD Cowen noted optimism regarding the initial response to Salesforce (NYSE:CRM)'s Agentforce, indicating potential for a robust new product cycle driven by artificial intelligence. Despite the positive outlook, the analyst suggested that expectations may be slightly inflated and that investors might need to be patient to witness substantial impacts from these developments.
Salesforce's performance in the second half of the year has shown general signs of improvement, according to industry checks. However, the analyst also pointed out that there are still areas where caution is being exercised. The decision to maintain the Hold rating reflects a balanced view of the company's prospects, acknowledging both the positive trends and the need for caution.
The new price target of $340 reflects the analyst's updated assessment of Salesforce's value, taking into account the encouraging signs around the company's product innovation and market trends. This revised target provides investors with a new benchmark as they monitor Salesforce's performance in the coming quarters.
As the market anticipates Salesforce's upcoming earnings report, the revised price target and continued Hold rating by TD Cowen will likely be factors considered by investors as they assess the company's current position and future potential in the competitive tech landscape.
In other recent news, Salesforce has reported strong second-quarter earnings, with earnings per share of $2.56, an 8% increase in sales, and a 9% rise in subscription and support revenues. The company also acquired Zoomin and Own Company for $1.9 billion in cash and plans to hire 1,000 new employees to support Agentforce sales. Salesforce's Data Cloud is performing strongly, with 1.9 trillion weekly AI transactions through Model Builder and 83.2 billion weekly workflows through Flow Builder.
Goldman Sachs (NYSE:GS) has raised Salesforce's price target from $325 to $360, maintaining a Buy rating, while Scotiabank (TSX:BNS) initiated coverage with a bullish Sector Outperform rating. However, both Erste Group and TD Cowen downgraded the stock to Hold due to projected slower growth. Salesforce has unveiled a suite of AI agent testing tools, including the Agentforce Testing Center, Sandboxes for Agentforce and Data Cloud, and monitoring tools for Agentforce.
InvestingPro Insights
Salesforce's financial metrics and market performance align with TD Cowen's cautiously optimistic stance. According to InvestingPro data, Salesforce boasts a market capitalization of $311.37 billion and an impressive gross profit margin of 76.35% for the last twelve months as of Q2 2025. This aligns with one of the InvestingPro Tips highlighting Salesforce's "impressive gross profit margins."
The company's P/E ratio of 55.65 and adjusted P/E ratio of 51.68 for the last twelve months as of Q2 2025 reflect the high valuation multiples mentioned in the InvestingPro Tips. However, it's worth noting that the PEG ratio of 0.21 for the same period suggests the stock might be undervalued relative to its growth prospects, supporting the "trading at a low P/E ratio relative to near-term earnings growth" tip.
Salesforce's strong market performance is evident in its 24.94% price total return over the past three months and its current price being 93.36% of its 52-week high. These metrics corroborate the InvestingPro Tips highlighting the company's "strong return over the last three months" and "trading near 52-week high."
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Salesforce, providing a deeper understanding of the company's financial health and market position.
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