Salesforce’s (CRM) $8 billion acquisition of Informatica (INFA) is drawing reactions from analysts, ahead of its Q1 earnings report. While several analysts see it as a strategic move to enhance AI and data capabilities, some question its execution and impact on growth.
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Analysts Bullish on Salesforce-Informatica Deal
Among the bullish analysts, Arjun Bhatia from William Blair reiterated a Buy rating on CRM stock. He praised Salesforce’s disciplined M&A strategy, as the deal was struck at 30% below prior discussions in 2024. Also, the Top analyst believes that Informatica’s data capabilities will boost Salesforce’s AI roadmap.
Similarly, analyst Scott Berg from Needham highlighted Informatica’s key role in CRM’s Agentforce AI ecosystem. While Berg noted high valuation concerns, he sees long-term benefits from stronger data integration tools. The analyst maintained a Buy rating on the stock with a price target of $400 (44.3% upside).
Also, Bradley Sills from BofA Securities backs the deal for its financial benefits, expecting it to boost CRM’s adjusted operating margin and free cash flow within two years. He believes cost synergies and better data infrastructure could make the deal accretive even sooner. Sills assigned a Buy rating to Salesforce stock but cut the price target to $350 (26.3% upside) from $360.
RBC Capital Flags Risks
RBC Capital analyst Rishi Jaluria warned that investors may view the deal negatively, citing Informatica’s past execution struggles and the lack of existing integration with Salesforce assets. Also, there are concerns about how much the deal will boost margins.
Nevertheless, Jaluria reiterated a Buy rating on CRM stock with a price target of $420, which implies 51.5% upside.
Analysts’ View Ahead of CRM’s Q1 Earnings
Ahead of Q1 results, analysts expect Salesforce to report earnings per share of $2.55, up 4.5% from the prior-year quarter. Also, the company’s revenue is expected to increase by about 7% to $9.75 billion in the first quarter.
Given the deal announcement, investors are likely to closely watch Salesforce’s guidance on how it plans to merge Informatica into Agentforce and Data Cloud. They will also focus on the $8 billion deal’s effect on margins and cash flow.
Is CRM a Buy, Hold, or Sell?
Turning to Wall Street, CRM stock has a Moderate Buy consensus rating based on 27 Buys, seven Holds, and two Sells assigned in the last three months. At $350.58, the average Salesforce stock price target implies a 26.48% upside potential.
