TD Cowen has reaffirmed its Buy rating on Salesforce.com (CRM) and held its price target at $325 as the software giant approaches its fourth-quarter earnings release, scheduled for February 25.
In pre-earnings diligence, the firm reported a notable increase in activity around Salesforce’s Agentforce product during the fourth quarter. While much of the feedback collected by TD Cowen was broadly positive, some respondents gave more cautious assessments of traction. The firm quantified part of its expectation for the company’s AI initiatives, forecasting roughly $800 million in AI annual recurring revenue.
TD Cowen said it does not expect to revise its existing medium-term revenue assumptions. Specifically, the firm left intact its projection of approximately 9% to 9.5% constant-currency organic subscription revenue growth for fiscal 2027. On valuation, TD Cowen noted that Salesforce is trading at about 12 times enterprise value to calendar year 2026 estimated free cash flow.
Overall, the firm characterized the setup as constructive for the shares but added that the upcoming results are unlikely to precipitate a major narrative change across the software-as-a-service sector. The firm therefore maintained both its Buy rating and its $325 price target heading into the quarterly report.
Market context around the stock is reflective of uneven sentiment. Salesforce shares were trading at $190.49 at the time of the report, down about 30% year-to-date and hovering near a 52-week low of $180.24. Separate analysis cited in the report indicated the company’s gross profit margin remains robust at 77.73% and suggested the shares may be undervalued at current levels.
Analyst reactions leading into the print have been mixed. Recent activity among sell-side and independent analysts includes:
- BMO Capital lowered its price target to $235 from $275 but maintained an Outperform rating, citing only modest uptake of Agentforce and Data Cloud.
- UBS trimmed its price target to $200 from $260 after conversations with customers and partners that raised growth concerns.
- JMP Securities moved more bullish on the company, upgrading to Market Outperform and setting a $315 price target while highlighting growth in Agentforce.
- Stifel reiterated a Buy rating with a $300 price target, pointing to advances in AI adoption even as the company lags the broader software sector.
These adjustments underscore a range of viewpoints on Salesforce’s near-term momentum and its ability to translate AI-related product activity into sustained revenue acceleration.
Salesforce is due to release its fourth-quarter financial results on February 25. Investors and market participants will be watching the company’s reported subscription revenue trends, AI-related recurring revenue figures, and any commentary on product adoption during the quarter.