Salesforce a top pick at Morgan Stanley as valuation 'compelling'
Salesforce (NYSE:CRM) shares are up around 1% after the company was designated a top pick at Morgan Stanley on Monday, with analysts at the bank flagging the company's solid risk/reward.
The firm, which already has an Overweight rating and a $350 per share price target on the stock, said CRM's greater top-line durability compared to investor expectations and its room for further margin expansion underpins the bullish thesis on their stock.
«Share price performance has been driven predominantly by an improvement in Salesforce's profitability profile, leaving more room for multiple expansion,» explained Morgan Stanley.
«An unrivaled breadth of Front Office workflows and the depth of customer data within their systems positions Salesforce favorably to benefit from GenAI apps,» they added.
The bank also believes Data Cloud is a key precursor to the success of Salesforce's future GenAI solutions, noting a compelling value proposition from recently updated bundles & pricing.
«CRM shares continue to trade at a meaningful discount to large-cap Software peers on a growth-adjusted GAAP earnings basis, offering compelling value,» the firm concluded.
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