Piper Sandler analyst Brent Bracelin has upgraded Salesforce Inc (CRM) from Neutral to Overweight and raised the price target from $268 to $325. This optimistic outlook reflects a favorable risk-reward scenario, driven by the potential for Salesforce’s free cash flow per share to double to over $20 by fiscal 2029 (calendar 2028). This growth is projected even if top-line revenue growth remains at a more moderate pace of 8%-9%.
Bracelin highlighted that Salesforce currently boasts the lowest valuation multiple compared to other large-cap software companies. This is evident across metrics such as Enterprise Value-to-Sales, Enterprise Value-to-Free Cash Flow, and Price-to-Earnings. Recent discussions with Salesforce leadership, partners, and customers have reinforced Bracelin’s belief that new pricing and packaging strategies could significantly expand multi-cloud adoption. The analyst is particularly optimistic about Agentforce, powered by the Atlas Reasoning Engine and paired with Data Cloud. These advancements are expected to stabilize demand and drive a recovery entering calendar 2026 (fiscal 2027).
Bracelin revised his estimates using a target EV/FCF of 23x (previously 22x) and a discount rate of 14% (previously 16%). He emphasized that the combination of free multi-cloud options through the new Foundations suite for existing Sales or Service cloud customers, alongside a 52% ARPU uplift for Einstein 1 compared to Unlimited, could be pivotal in igniting growth recovery from calendar 2025 (fiscal 2026) to calendar 2026 (fiscal 2027).
Traditionally, Salesforce has introduced platform updates three times a year. However, the rapid pace of AI development has altered this cadence, particularly within Data Cloud, where new updates are now released monthly. Bracelin highlighted that Salesforce CEO Marc Benioff and his team are operating in a “founder mode,” characterized by accelerated internal product execution. This is supported by veteran boomerangs and new management additions, bringing extensive experience from companies like Microsoft Corp (MSFT), Amazon.Com Inc (AMZN) Amazon Web Service, Alphabet Inc (GOOG) Google, Oracle Corp (ORCL), and others.
According to Bracelin, years of manual Trailblazer developer work building Flows and Apex Actions have transformed into a strategic advantage. These elements can be repurposed to provide crucial guardrails, powering agents through the Atlas Reasoning Engine in conjunction with Data Cloud. Further margin leverage and share buybacks could sustain low double-digit free cash flow growth per share for the next 3-5 years. Bracelin believes that CRM shares could benefit from both earnings and multiple expansions. He projects third-quarter revenue of $9.34 billion and EPS of $2.43.
As of Tuesday’s close, CRM stock is up 1.35% at $267.67.
