Analysts Continue To See Upside In Salesforce Post Q2 Beat Despite Challenging Macros

Salesforce, Inc CRM clocked 22% revenue growth to $7.72 billion in Q2, beating consensus. The EPS of $1.19 topped the consensus.
The board approved a buyback of up to $10 billion.
The Q3 and FY guidance were below the consensus.
Mizuho analyst Gregg Moskowitz reiterated a Buy and cut the price target from $245 to $235.
He cheered the upbeat Q2 while disappointed with the guidance due to macro challenges.
Notwithstanding the macro challenges, he reiterates that CRM remains very well-situated to help its vast customer base manage revenue and process optimization via digital transformation.
BMO Capital analyst Keith Bachman reaffirmed Salesforce with an Outperform and slashed the price target from $223 to $207.
He had lowered his growth forecasts before the report, which were better than the company's guidance.
Piper Sandler analyst Brent Bracelin maintained an Overweight and lowered the price target from $220 to $200.
Mixed Q2 results with FX headwinds, considerable deal delays, and compression of deal sizes contributed to guidance, which was well below his estimate.
That said, leadership remains committed to driving margin expansion and unveiled the first buyback since the 2004 IPO.
He reduced estimates on what appears to be a kitchen-sink guide, factoring in many of the near-term challenges.
Scott Berg from Needham maintained a Hold.
He acknowledged the dismal guidance due to macro pressures weighing more on EU and North American sales cycles than previously assumed.
The analyst noted that CRM's buyback was it's first of any kind.
Raymond James analyst Brian Peterson maintained a Strong Buy and cut the price target from $250 to $225.
The re-rating followed Q2 results offering mixed fundamentals, with the company referencing some extension to sales cycles.
Overall growth was not void of positive news and also included further evidence of margin expansion momentum and the share repurchase program.
Morgan Stanley analyst Keith Weiss reiterated an Overweight and price target of $273.
A large cut to FY23 revenue targets likely spurs investor debate on Salesforce's growth potential.
But the analyst views this more as a de-risking of the outlook in response to a weakening macro, while more fundamental initiatives around margins and capital allocation improve the longer-term FCF story.
RBC Capital analyst Rishi Jaluria reiterated Outperform and the price target of $235.
Salesforce delivered subdued results driven by more pronounced macro headwinds, leading shares down ~7% after hours.
Management noted that macro impacts showed up in July, resulting in longer sales cycles, more approval layers, and deal compression, which the disappointing guide reflected.
That said, the positive long-term takeaways were a reaffirmed focus on margins and the buyback, which suggests that large-scale M&A is likely on the back burner for now.
JMP analyst Patrick Walravens reiterated a Market Outperform and a $250 price target.
The re-rating reflected better-than-expected Q2 results despite deals taking longer to close, particularly in July.
Price Action: CRM shares traded lower by 5.69% at $169.76 on the last check Thursday.

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