TD Cowen analyst Derrick Wood downgraded Braze Inc (NASDAQ: BRZE) from Buy to Hold with a price target of $47.50 (from $36.00).

The analyst comments: “We are downgrading BRZE to hold following the proposed acquisition by CRM, and raising our PT to $47.50 (~5.3x EV/CY27E Sales), in line with the proposed acquisition price. CRM signed a definitive agreement to acquire BRZE for ~$5.66b in EV, marking a ~58% premium to prior day closing price. Likely was a competitive process. FY28 expected close. We see relatively low antitrust risk.

CRM has signed a definitive agreement to acquire BRZE for ~$5.66b in EV or $47.50/ share. The announced deal represents ~6.2x EV/CY26E Sales on $913m (+22% organic) and ~5.3x EV/CY27E Sales on $1.07b (+17%), above its mid-cap peer group at ~5.6x and ~4.9x, respectively. We note the EV/TTM Sales multiple of ~6.8x is higher than what CRM paid for INFA (~5.1x), which had a much lower growth profile, but below ~2025 M&A in the enterprise software space incl. HCP (~11x TTM) and CFLT (~10x TTM). While the proxy statement is not yet released, we expect it to include a competitive bidding process from other strategics (i.e., ADBE) given the ~58% premium to BRZE's unaffected closing price on 10/19. We see positive implications for close peer KVYO (stock up +12%), noting 1) shares trade at ~2.9x EV/ CY27E Sales (against 19% growth) and 2) we've seen M&A domino effects in MarTech in past consolidation cycles.”

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Shares of Braze Inc closed at $45.57 yesterday.