Salesforce: BofA says channel checks are positive

Investing.com -- Bank of America reiterated its Buy rating on Salesforce (NYSE: CRM) with a $440 price target in a note Tuesday, citing solid deal activity and a growing pipeline for Agentforce.

Following discussions with nearly a dozen key Salesforce system integrator partners, BofA analysts noted “healthy deal activity and generally improving tone” across the company’s core businesses.

They highlighted “stable Sales and Service Cloud deal activity with added pull-through from Agentforce pilots”, as well as new use cases for Agentforce, including call summarization and semantic search.

Additionally, data cloud deals remain strong, supporting Agentforce data preparation, while Mulesoft activity has picked up. However, the firm observed a “still mixed tone on Tableau and Slack”.

BofA sees potential for 1% upside to its Q4 current remaining performance obligation (cRPO) growth estimate of 9.4% in constant currency, based on improving deal momentum.

The firm expects Salesforce management to guide FY26 revenue growth between 9% and 10%, in line with Q4 cRPO guidance. However, BofA is lowering its FY26 margin expansion forecast from 150 basis points to 100 basis points, citing incremental investment in Agentforce, which added 1,000 sales reps in November 2024.

Despite the 22% rise in Salesforce shares since Agentforce’s launch in mid-September, BofA noted that the stock is still down 2% year-to-date due to investor concerns over the broader applications spending environment.

The firm does not expect Salesforce’s FY26 outlook to be a major catalyst for the stock, citing a potentially conservative approach under its new CFO and limited near-term contribution from Agentforce.

Still, BofA emphasized that CRM remains a top pick, with Salesforce positioned as “a top reacceleration story this year.” The company is expected to return to 12% to 13% growth exiting FY26, benefiting from a better software spending environment and Agentforce’s expanding role.

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