Salesforce (CRM) is expected to achieve accelerated revenue growth through fiscal-year 2025, exceeding investor expectations, Morgan Stanley said in a note e-mailed Thursday.
“We see several vectors for Salesforce to drive top-line upside versus muted investor growth expectations, yielding accelerating revenue growth through FY25,” Morgan Stanley said.
Investors have modest expectations, but the possibility of increased prices, bundled products, and widespread adoption of data cloud present an appealing balance of risk and reward for Salesforce. Although the surge in GenAI applications might take over a year to materialize, data cloud will likely prove a bridge to better growth in 2024, Morgan Stanley said.
Despite a solid and improving positioning for generative AI, the stock continues to trade at a discount to large cap software peers on a growth-adjusted GAAP earnings basis, presenting a “compelling risk-reward ahead,” it added.
Morgan Stanley upgraded Salesforce to overweight and increased its price target to $350 from $290.