Jefferies has raised its price target on Salesforce.com to $300 from $250, maintaining a buy rating as the company’s growth outlook strengthens. The investment bank also highlighted Salesforce’s accelerating revenue and cash flow performance, noting a 14% year-over-year increase in remaining performance obligations and an 81% rise in free cash flow to $1.1 billion.
The upgrade follows Salesforce’s fiscal third-quarter results, which included adjusted earnings per share of $5.90, significantly exceeding analyst expectations of $3.27, and quarterly revenue of $11.3 billion, in line with forecasts. Subscription and support revenue grew 12% to $10.82 billion, while the company’s free cash flow yield stood at 9%, with a PEG ratio of 0.6.
Jefferies now values Salesforce at 13 times enterprise value relative to free cash flow for the calendar year 2027. The firm’s fair value estimate for the stock is $310.79, according to InvestingPro. Salesforce’s stock closed at $205.69 on August 25, with after-hours trading at $204.26.
The company’s remaining performance obligations, a key metric tracking future contracted business, rose 14% in constant currency, accelerating from two consecutive quarters of 13% growth. Salesforce’s projected third-quarter revenue growth is 14%, above the market estimate of 13%. The full-year revenue guidance was also raised to a range of $46.1 billion to $46.4 billion.
Bernstein SocGen Group separately increased its price target on Salesforce to $195 from $173, though it maintained an underperform rating. The divergent views underscore a split in analyst sentiment despite the company’s improving fundamentals.
