Why Piper Sandler Is Bullish On Anaplan, Neutral On Salesforce

Piper Sandler analyst Brent Bracelin is hot and cold on two software stocks due to upside projections and acquisitions.

The Anaplan Thesis: Bracelin upgraded shares of Anaplan Inc. PLAN from Neutral to Overweight and raised the price target from $66 to $87.

“2021 could usher in the next back-office makeover, which is long overdue,” Bracelin said in the upgrade note. 

The pandemic and remote work have exposed aging back-office workflows, the analyst said, adding that the next two years could see accelerated adoption of real-time planning applications.

Partnerships with Deloitte, Accenture and KPMG are seen as a positive for Anaplan by the analyst. The last quarter saw two-thirds of top 20 deals being partner influenced, he said. 

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The Salesforce Thesis: Bracelin downgraded shares of Salesforce.com CRM from Overweight to Neutral and lowered the price target from $278 to $242.

Salesforce has invested over $43 billion in two acquisitions in less than two years, the analyst said.

The $15.7 billion for Tableau and $27.7 billion for Slack Technologies WORK add up to 194 million fully diluted shares since July 2019, he said. 

“This overhang creates a more challenging set-up for CRM during 2021,” said Bracelin.

Salesforce is a “hungry hippo” that needs time to digest the acquisitions, the analyst said, adding that he will revisit the rating and price target at a future date.

“The combination of two large transactions in a span of less than two years creates a more challenging set-up for CRM in the coming year.”

The two acquisitions are the largest in Salesforce history, he said. 

Price Action: Anaplan shares gained 1.33% Monday, closing at $72.41. Salesforce closed at $218.25, down 1.71%.