Bernstein Raises Salesforce Price Target to $195 Amid AI Growth Concerns
Bernstein SocGen Group raised its price target on Salesforce.com (CRM) shares to $195 from $173, while maintaining an Underperform rating. The firm noted that Salesforce delivered second-quarter fiscal 2027 results and raised guidance, with the company's adjusted earnings of $5.90 per share significantly surpassing analysts' projections of $3.27.
The company reported a notable increase in free cash flow, reaching $1.1 billion, an 81% year-over-year increase. Salesforce also highlighted growing demand for its products, including Agentforce and the new Claudeforce product with Anthropic. The firm expressed concern that AI enthusiasm could lead to excessive expectations.
Bernstein said the question remains whether Salesforce can accelerate organically or must acquire to drive better than 6% to 8% growth. The company's cloud revenue potential grew by 14% in constant currency, reaching $33.5 billion. Despite the Underperform rating, the stock trades at a P/E ratio of 23.86 with a PEG ratio of 0.6, suggesting attractive valuation relative to growth.