© Reuters. 3 reasons why Baird downgraded Salesforce (CRM) stock today
By Senad Karaahmetovic
Baird analysts downgraded Salesforce (NYSE:) to Neutral from Outperform, sending shares nearly 0.5% lower today.
The analysts highlighted the key drivers behind the downgrade being: the tough macro environment, seat-based software pressure, and the recent executive departures.
“We believe the combination of macro headwinds and seat-based software pressure (driven by recent workforce cuts/hiring slowdown) could pressure revenue growth near term. The increase in executive turnover (i.e., Bret Taylor, Stewart Butterfield, other Slack executives, Gavin Patterson) in aggregate are a surprise and could portend execution risk,” they said in a client note.
Given these headwinds, the analysts cut FY24 revenue/EPS estimates. While they see FX pressures easing in the coming quarter, it still may take some time for macro headwinds to abate.
“We view CYQ2’23 as a time to potentially revisit ahead of easier 2H comps,” the analysts added.
Salesforce stock price is down almost 50% year-to-date (YTD). Shares are down about 1% today.