Guggenheim Partners increased its price target on Salesforce to $270 from $228 on Tuesday, maintaining a buy rating as the software company’s shares traded at $205.62. The firm cited Salesforce’s second-quarter results, which topped most metrics, alongside an upward revision to full-year guidance that exceeded expectations and a third-quarter outlook above Wall Street forecasts.
The new target implies an enterprise value multiple of 5.4 times recurring revenue for the next twelve months, based on Guggenheim’s assessment of the company’s recurring free cash flow as a hyper-efficient SaaS operator with minimal growth or decline. Gross margin stood at 77.6%, while the PEG ratio was reported at 0.6.
Salesforce’s CFO Robin Washington highlighted that net new annual recurring order value growth reached its strongest level in four years, signaling organic revenue reacceleration in the second half. The company’s churn rate remains near historical lows, supporting the outlook. COO Miguel Milano outlined the operational underpinnings of the reacceleration plans, while CEO Marc Benioff emphasized ongoing efforts to enhance customer value through artificial intelligence capabilities.
Peer firms also adjusted their targets. Oppenheimer, Baird, and Stifel each raised their price targets to $275, while BMO Capital increased its target to $260. Wells Fargo set its target at $230, reflecting a more conservative stance. Organic growth estimates from Wells Fargo project 7.1% growth in the third quarter and 8.4% in the fourth.
Analysts pointed to Salesforce’s product portfolio, including Agentforce and Slack, as key drivers behind the upgraded outlooks.
