BofA analysts raised the price target on Salesforce (NYSE:CRM) to $250 from $235, maintaining a Buy rating and reiterating the stock as a top pick.
Analysts told investors in a note that channel checks suggest a stable first quarter, with demand holding in sales and service cloud.
"We spoke with a dozen key partners to gauge sentiment and demand for Q1," analysts said. "We found that deal activity is largely holding and meeting expectations. Elongated sales cycles do not appear to be improving yet, but they are not materially lengthening either."
They added that many shared some optimism for the second half of the year, despite a cautious spending environment, while the firm also noted pockets of strength in Industry Clouds and MuleSoft, with stable demand for core Sales and Service Cloud, although the feedback on Slack remains mixed.
"Salesforce experienced strong Q4 seasonality, which was perhaps more pronounced in such a strong Q4FY23. Coupled with channel commentary for inline-ish Q1 deal activity, we forecast Q1 rev and cRPO growth to be more in-line with our base case of +10% (+12% cc) and +11% (11% cc). With ongoing focus on disciplined growth, we expect margin upside of 50 to 100 bps to our Q1 27% est," analysts concluded.