The January quarter is expected to be a key inflection point in the story for Salesforce (CRM) as it heads into 2023 with a number of key goals to rationalize its cost structure and double down on its core growth tenets, according to analysts at Wedbush.
In a note to clients, the analysts wrote that they were maintaining their ‘Outperform’ rating for the stock and price target of US$200.
Salesforce shares rose about 2.8%, trading at about $US174.40 just after the market opened on Thursday.
READ: Salesforce in the cross-hairs of activist investor Elliott Management as pressure mounts on tech giant
The analysts wrote that their bullish view of Salesforce is based on deal flow which has stabilized and is slowly improving after a rocky few quarters.
“While many on the Street have quickly abandoned this name over the past six months, our view is despite the noise and near-term storm that CRM will emerge from this period in a stronger financial position exiting than entering 2023,” the analysts wrote.
“So far we are expecting a roughly in-line January quarter with some puts and takes in the field that give some momentum into the next 12 to 18 months to turn around this once golden growth story.”
The analysts also noted that Salesforce was positioning itself to battle with Microsoft for continued market share for cloud and collaboration spaces over the next few years while navigating macro headwinds on the horizon.
“We believe the risk/reward is compelling at current valuations for investors willing to hold this core cloud stalwart stock during this near-term volatile period of macro/demand uncertainty with the activism wild card poker game building,” they concluded.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie