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Shares of Salesforce (NYSE:CRM) are set to open lower Friday after Wolfe Research analysts downgraded to Peer Perform from Outperform following yesterday’s results.
The analysts saw thesis-changing results as they showed growth is “materially decelerating following a Covid pull-forward, execution missteps, and M&A misfires creating meaningful idiosyncratic headwinds.”
“With growth materially decelerating to implied LSD bookings growth in 4Q, new bookings this year declining 53%, and a high single digit top line growth estimate for next year with low teens FCF growth, that thesis has changed,” they wrote in a client note.
The analysts opted to go to the sidelines after 10 years of having a Buy-equivalent rating on CRM stock. The analysts added that Salesforce is entering “a new and difficult chapter.”
They removed the $160 per share price target on Salesforce and believe shares are fairly valued at $115-135.
Salesforce shares closed at $147.00, down over 8.2% on the day.
