Analysts' Perspectives on Salesforce Stock Ahead of Earnings Report

Anticipation Builds as Salesforce Prepares to Unveil Fourth-Quarter Results

As Salesforce gears up to release its fourth-quarter financial results, analysts exhibit a predominantly positive outlook on the company’s future, particularly in light of its advancements in artificial intelligence. According to data from Visible Alpha, among 25 analysts following Salesforce, 20 have issued "buy" or equivalent ratings for the stock, while the remaining five recommend holding the shares. This widespread optimism is reflected in a consensus price target of approximately $401, which indicates a potential upside of nearly 30% compared to the recent closing price of $309.80.

The optimism surrounding Salesforce is significantly fueled by the early traction of its Agentforce platform, which was launched in September. Analysts from Deutsche Bank maintain a "buy" rating and have set a price target of $400, underscoring the "AI halo effect" that appears to be drawing increased investment toward Salesforce's offerings. They emphasize that while current spending on Agentforce is just beginning to take off, the platform holds substantial potential for future growth.

Looking ahead, Salesforce is poised to introduce Agentforce 2.0 in February 2025. This updated version of its AI agent program will enable users to deploy AI agents directly within the Slack application, incorporating features such as advanced reasoning, seamless integration, and enhanced customization capabilities. The upcoming full release is expected to significantly improve user productivity and precision, further strengthening the company's foothold in the AI sector.

However, not all analysts share the same level of enthusiasm. Guggenheim analyst John DiFucci recently downgraded Salesforce's rating from Neutral to Sell, with a price target set at $247. His concerns center on the company's ability to effectively monetize Agentforce without acquiring additional assets, suggesting a more cautious approach to the stock.

Despite this mixed sentiment, the overall consensus among analysts remains optimistic, with many anticipating that Salesforce's AI-driven strategies will play a critical role in its growth trajectory over the coming year. The company is expected to report revenue of $10.05 billion, marking an 8% increase year-over-year, along with adjusted earnings per share of $2.62, up from $2.29 in the previous year.

Adding to the company's developments, Salesforce has announced that Robin Washington, the former CFO of Gilead Sciences, will join as the new chief operating and financial officer on March 21. She will take over from Brian Millham, the current COO, who plans to retire in May, and CFO Amy Weaver, who previously announced her departure upon the appointment of a successor. Analysts from Oppenheimer view Millham's exit as a "negative surprise," yet they express confidence in Washington's ability to enhance operational efficiency. They have reiterated their "outperform" rating and a price target of $415, describing Salesforce as "one of the healthiest long-term profitable growth stories" within the software-as-a-service industry.

Salesforce shares experienced a nearly 3% decline on Friday, closing at $309.80 amidst a broader market downturn. This marks a challenging start to 2025 for the stock, which has dropped about 7% year-to-date after a strong performance in 2024, where it outperformed the S&P 500 index.