Barclays Maintains Overweight on Salesforce, Lowers PT to $316 from $347

Barclays Maintains Overweight on Salesforce, Lowers PT to $316 from $347

Barclays has maintained its overweight rating on Salesforce, Inc. (NYSE: CRM), while lowering its price target to $316 from $347. The investment bank's decision reflects a cautious view on the company's near-term prospects, despite its strong performance in AI and data management initiatives [1].

Salesforce reported robust first-quarter results for fiscal year 2026, with an 8% growth in constant currency and a revised full-year revenue guidance of $41.0 billion to $41.3 billion. The company's earnings per share (EPS) for Q1 was $2.58, in line with guidance. However, Barclays has expressed concern about the integration challenges that may arise from Salesforce's planned acquisition of Informatica for approximately $8 billion [1].

The acquisition aims to bolster Salesforce's agentic AI strategy by enriching its data catalogs and enhancing data governance capabilities. However, Barclays has noted that the integration of Informatica's technologies could lead to short-term disruptions in operations and unexpected costs. Additionally, the substantial price tag may impact Salesforce's cash reserves and potentially affect its ability to pursue other strategic initiatives or return capital to shareholders in the near term [1].

Despite these concerns, Barclays acknowledges Salesforce's strong market position and strategic focus on AI and data integration. The company's expansion of sales capacity and distribution channels presents a significant opportunity for revenue growth. By increasing its sales force and enhancing productivity, Salesforce can reach more potential customers and deepen relationships with existing ones. The revised sales compensation strategy, aimed at expanding the renewal base, could lead to higher customer retention rates and increased upselling opportunities [1].

In conclusion, while Barclays maintains an overweight rating on Salesforce, the lowered price target reflects a cautious view on the company's near-term prospects. The investment bank's concerns about the Informatica acquisition and potential integration challenges highlight the risks investors should consider. However, Salesforce's strong market position and strategic focus on AI and data integration provide a solid foundation for long-term growth.

References:

[1] https://www.investing.com/news/swot-analysis/salesforces-swot-analysis-ai-initiatives-drive-growth-as-stock-navigates-challenges-93CH-4197972