Guggenheim Securities upgraded Salesforce (CRM, Financials) to Neutral from Sell on Monday, saying the stock's recent decline better reflects its business prospects. The firm removed its price target.
Salesforce shares were trading at $247.26 when Guggenheim made the call, according to Investing.com. InvestingPro rated the company's financial health as good, citing gross profit margins of 77.19 percent.
The firm downgraded Salesforce in January, citing doubts about the company's ability to effectively monetize its new Agentforce platform and concerns that fiscal 2026 guidance would miss Wall Street estimates. Salesforce's stock initially surged 42 percent after the August 2024 Agentforce launch, outperforming the IGV software index's 29 percent rise during the same period.
Since January, the stock has dropped 26 percent, steeper than the IGV's 15 percent decline and the S&P 500's 11 percent loss. Management changes, including the departure of Salesforce's chief operating officer and a new chief financial officer appointment, added to investor uncertainty.
Salesforce's fiscal 2026 revenue forecast came in below consensus expectations, compounding the selloff. The company's market capitalization currently stands at $237.62 billion.
Separately, Salesforce reported a 20 percent year-over-year increase in annual recurring revenue for its Salesforce Industries division, reaching $5.7 billion. Overall company revenue rose 9 percent. Truist Securities maintained a Buy rating on Salesforce and set a $400 price target.
Salesforce also raised its quarterly dividend by 4 percent to $0.42 per share and awarded 95,777 restricted stock units to employees from its acquisitions of Own Company and Zoomin. A recent company report said 76 percent of retailers plan to increase their investment in artificial intelligence, a key focus area for Salesforce moving forward.
The company is scheduled to report earnings on May 28.
