Citi Cuts Salesforce Price Target, Sees Softer Q1 Cloud Spending
Citi lowered its price target for Salesforce and downgraded the stock, citing customer checks that signaled softer spending on cloud software ahead of Q1. The bank now expects a deceleration in subscription revenue growth as enterprises trim digital transformation budgets.
1. Citi Adjusts Rating and Price Target
Citi downgraded Salesforce’s rating and reduced its price target after recent checks with CIOs and procurement teams revealed a pullback in IT budgets. The firm flagged that enterprises are delaying non-essential cloud projects, pressuring near-term software license sales.
2. Customer Checks Highlight Budget Constraints
Insights from channel partners indicated that 60% of surveyed customers plan to defer new subscriptions or renewals until later in the year. This shift is attributed to cautious spending as companies reassess digital transformation priorities.
3. Impact on Revenue and Guidance
Citi now projects Q1 subscription revenue growth to slow by roughly 3 percentage points versus prior forecasts, with full-year growth trimmed accordingly. Analysts warn that persistent macro uncertainty could prolong the headwinds into subsequent quarters.