On Wednesday, TD (TSX:TD) Cowen adjusted its outlook on Salesforce.com (NYSE:CRM), increasing the company's price target from $315.00 to $330.00 while maintaining a Hold rating. The firm cited improved sales execution and new strategies as key factors for the adjustment.
The reassessment followed investor meetings with Salesforce's Investor Relations Director Valmik Desai and IR Senior Manager Brooke Bakewell. According to TD Cowen, despite ongoing macroeconomic pressures, Salesforce's performance in the second half of the year demonstrated strength due to enhanced sales execution.
The company's recent adjustments to its sales approaches, along with pricing and packaging strategies, are expected to contribute to higher product attachment and average revenue per user (ARPU) growth.
TD Cowen also noted that while artificial intelligence (AI) is not projected to significantly impact Salesforce's fiscal year 2025, the company is experiencing strong momentum in its Data Cloud business.
This positive trend in the Data Cloud segment has contributed to the firm's decision to raise the price target for Salesforce shares.
The updated price target of $330.00 reflects TD Cowen's recognition of Salesforce's potential to achieve growth in ARPU through its strategic initiatives. Despite this potential, the firm continues to recommend a Hold rating on the stock, indicating a neutral stance on the company's near-term performance prospects.
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