A survey from Oppenheimer indicated that growth prospects for cloud-based software company Salesforce (NYSE: CRM) remained uncertain. Top-rated Oppenheimer analyst Brian Schwartz‘s survey of 38 customers at the Dreamforce conference revealed varying outlooks on 2024 IT spending.
The analyst noted that CRM’s customers were uncertain about their IT spend and this could prove to be a headwind for the company’s sales as “drivers for reaccelerating top-line growth are hard to find.” Schwartz added that while the Street is expecting CRM to grow between 10% and 11% in FY 2025, this growth may be achievable, but it won’t be easy.
The analyst stated, “Customers interviewed at Dreamforce expect a less seasonal 4Q IT budget flush, but are more optimistic about 2024 IT budget growth plans.”
While seen as a medium-term initiative, Schwartz believes that generative AI won’t provide an immediate boost. The analyst reiterated a Buy rating and a price target of $250 on the stock, citing low expectations and the company’s stabilizing sales organization, international presence, and long-term growth outlook. The analyst’s price target implies an upside potential of 23.6% at current levels.
Is CRM Stock a Good Buy Now?
Analysts are cautiously optimistic about CRM stock with a Moderate Buy consensus rating based on 24 Buys, 11 Holds, and one Sell.
