Piper Sandler analyst Brent Bracelin upgraded Salesforce Inc (NYSE:CRM) from Neutral to Overweight and raised the price target from $268 to $325.

The re-rating reflects a favorable risk-reward given the potential for free cash flow per share to double to $20+ by fiscal 2029 (calendar 2028) from $9.65 in fiscal 2024 (calendar 2023), even if top-line growth remains at subdued levels of 8%-9%.

Bracelin flagged that Salesforce also has the lowest valuation multiple relative to large-cap software peers on an Enterprise Value-to-Sales, Enterprise Value-to-Free Cash Flow, and Price-to-Earnings basis.

Also Read: NVIDIA, Salesforce Announce Strategic AI Collaboration: What To Know

Discussions last week with the leadership team, partners, and customers gave the analyst confidence that new pricing and packaging could broaden multi-cloud adoption.

The promise of Agentforce powered by the Atlas Reasoning Engine paired with Data Cloud could help stabilize demand and drive a recovery entering calendar 2026 (fiscal 2027).

Bracelin raised estimates using a target EV/FCF of 23x (versus 22x prior) and a 14% discount rate (16% prior).

Bracelin noted that the combination of free multi-cloud options via the new Foundations suite for existing Sales or Service cloud customers and the 52% ARPU uplift to Einstein 1 versus Unlimited could be crucial in sparking a growth recovery from calendar 2025 (fiscal 2026) to calendar 2026 (fiscal 2027).

The analyst flagged that Salesforce has historically provided new platform updates three times per year. However, the pace of AI has changed this cadence, most notably within Data Cloud, where new platform updates are released monthly.

Salesforce chief Marc Benioff and team are operating in "founder mode" with the accelerated pace of internal product execution, supported by veteran boomerangs and new management add that bring strong backgrounds from Microsoft Corp (NASDAQ:MSFT), Amazon.Com Inc (NASDAQ:AMZN) Amazon Web Service, Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Oracle Corp (NYSE:ORCL), and more Bracelin highlighted.

Years of manual Trailblazer developer work building Flows and Apex Actions have turned into a strategic advantage, according to the analyst. He added that these can be repurposed to provide critical guard rails to power agents via the Atlas Reasoning Engine paired with Data Cloud.

Further margin leverage and buybacks could sustain low double-digit free cash flow growth per share for the next 3-5 years. CRM shares could benefit from earnings and multiple expansions, as per Bracelin.

Bracelin projects third-quarter revenue of $9.34 billion and EPS of $2.43.

Price Action: CRM stock is up 1.35% at $267.67 at the last check on Tuesday.

Also Read:

• Salesforce Unveils New Agentforce Partner Network, Partners With Google Cloud

Photo via Shutterstock