Jefferies has raised its price target for Salesforce to $300 from $250, maintaining a Buy rating as the software giant’s growth outlook strengthens amid accelerating demand for artificial intelligence capabilities.
The upgrade follows Salesforce’s fiscal third-quarter results, which included an adjusted earnings beat of $5.90 per share against a $3.27 estimate, and revenue of $11.3 billion, in line with forecasts and up 11% year-over-year. The company also reported an 81% year-over-year increase in free cash flow to $1.1 billion, while subscription and support revenue rose 12% to $10.82 billion.
Salesforce’s current remaining performance obligation (cRPO) grew 14%, exceeding its 13% constant currency guidance and marking the first beat in three quarters. The company guided for 14% cRPO growth in the current quarter, above the Street’s 13% estimate. Full-year revenue guidance was raised to a range of $46.1 billion to $46.4 billion.
Jefferies attributed the upward revision to Salesforce’s expanding AI ecosystem, including the recent launches of Agentforce, Slack integrations, and Claudeforce, a product developed with Anthropic. The firm also noted the impact of recent acquisitions, such as Contentful and Fin, which are expected to bolster contracted business. Salesforce executives are returning from AI labs, with further innovation and customer announcements anticipated at the upcoming Dreamforce conference.
The valuation framework supports the new target, with Salesforce valued at 13 times calendar 2027 enterprise value to free cash flow and a 9% free cash flow yield. The stock currently trades near $206, while InvestingPro’s fair value estimate stands at $310.79. Not all analysts share the bullish view, as Bernstein SocGen Group raised its target to $195 from $173 but maintained an Underperform rating.
