Salesforce: Enterprise Spending Forecasts Unclear, Hold
Summary
- We are hold-rated on Salesforce. We believe Salesforce is well-positioned to grow in the long run, but expect macroeconomic headwinds to pressure the stock in the near term.
- We expect Salesforce to face pressure as customers figure out their spending expectations under current macroeconomic headwinds.
- We’re also concerned about Salesforce’s growth, as companies are not as likely to embark on new projects or expand their CRM spending during periods of financial stress.
- We recommend investors wait on the sidelines until the end of the year as the outlook on how business and enterprise will spend their budgets becomes clearer.
- Salesforce is trading at 22.0x C2024 on a P/E basis compared to the average of 78.3x. We’re hold-rated as we expect the stock to face more downside.
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