'Thesis has changed': Salesforce (CRM) stock selloff extends on analyst downgrade

December 2, 2022 9:28 AM EST
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Price: $165.61 +0.66%

Rating Summary:
    45 Buy, 17 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 24 | New: 19
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Shares of Salesforce (NYSE: CRM) are set to open lower Friday after Wolfe Research analyst Alex Zukin downgraded to Peer Perform from Outperform following yesterday’s results.

The analyst saw thesis-changing results as they showed growth is “materially decelerating following a Covid pull-forward, execution missteps, and M&A misfires creating meaningful idiosyncratic headwinds.”

“With growth materially decelerating to implied LSD bookings growth in 4Q, new bookings this year declining 53%, and a high single digit top line growth estimate for next year with low teens FCF growth, that thesis has changed,” Zukin wrote in a client note.

The analyst opted to go to the sidelines after 10 years of having a Buy-equivalent rating on CRM stock. The analyst added that Salesforce is entering “a new and difficult chapter.”

Zukin removed the $160 per share price target on Salesforce and believes shares are fairly valued at $115-135.

Salesforce shares closed at $147.00, down over 8.2% on the day.

By Senad Karaahmetovic

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