salesforce.com (CRM) PT Lowered to $400 at Scotiabank

Scotiabank analyst Allan Verkhovski lowered the price target on salesforce.com (NYSE: CRM) to $400.00 (from $440.00) while maintaining a Sector Outperform rating.

The analyst commented: "CRM finished the year strong with CC cRPO growth accelerating to 10.5%, driven primarily by early renewals and resulting in a 110bps beat, in line with our preview. The company guided FY26 CC subscription revenue growth of ~9%, modestly higher than our expectation of above 8.5% but below the consensus of 9.5%, which we thought was an unfairly high bar. Agentforce has over 3,000 paid customers, and all of CRM’s top 10 wins included Data and AI. Data Cloud and AI ARR reached $900 million, growing 120% y/y. While Agentforce's revenue contribution is expected to be modest this year, momentum is anticipated to build throughout the year, leading to a more significant contribution in FY27. Guidance for a 100bps non-GAAP operating margin expansion to 34% is strong, with CRM planning to repurpose thousands of support agents, not hire any new engineers this year (30% productivity increase), and potentially grow the sales organization by 10-20%. We'll learn more about Agentforce trends at Trailhead DX on March 5-6th in San Francisco, along with Tableau Next and a teaser of a new ITSM product. We would be buying shares currently trading at 18x CY26E EV/FCF AH. Our $400 price target is based on 25x CY26E EV/FCF."

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