Piper Sandler Upgrades Salesforce; Cites Favorable Risk-Reward Basis

Piper Sandler has adopted a more positive outlook on Salesforce, citing a favorable risk-reward scenario for the software company. The firm has upgraded its rating on Salesforce from “neutral” to “overweight,” highlighting the potential for free cash flow per share to increase significantly, projecting it could double to $20 by 2029 from $9.65 in 2024, even if revenue growth remains modest at 8-9%.

According to Piper Sandler analysts, Salesforce offers the lowest valuation multiples among large-cap software peers, assessed by metrics such as EV/Sales, EV/Free Cash Flow, and Price/Earnings ratios.

The firm expressed confidence in Salesforce’s leadership and their recent discussions regarding new pricing and packaging strategies, which may expand multi-cloud adoption. Additionally, the anticipated Agentforce powered by the Atlas Reasoning Engine, in conjunction with Data Cloud, could potentially stabilize demand or foster a recovery as we approach 2026.

Consequently, Piper Sandler has revised its estimates and increased the price target for Salesforce to $325, up from $268, applying a target EV/FCF of 23x—slightly higher than the prior 22x—and adjusting the discount rate from 16% to 14%.

Salesforce shares ended the trading day at $264.21.