Citi issued a research report on Tuesday, lowering its price target for Salesforce.com from $200 to $188 ahead of the company's first-quarter fiscal 2027 earnings release, while maintaining a "Neutral" rating. This adjustment primarily reflects concerns over extended renewal cycles and trends in customer portfolio optimization. Reasons for Downgrade: Extended Deal Cycles and Renewal Optimization Citi analyst Tyler Radke noted in the report that feedback from field checks indicates Salesforce.com is facing challenges with lengthening deal cycles and customers undertaking broader portfolio optimization during renewals. Consequently, the analyst has revised down the fiscal 2027 profit forecast to the lower end of the company's own guidance range. Citi anticipates organic cRPO growth of approximately 9% for Salesforce.com in Q1 FY2027, but expects guidance for Q2 growth to potentially slow further to 8%-8.5%. Current market consensus for Q1 FY2027 estimates revenue around $11.06 billion and adjusted earnings per share of $3.12. Fundamental Review: AI-Driven Growth Amid Persistent Macro Pressures Reviewing fiscal 2026 (ended January 2026), Salesforce.com made significant strides in AI—its AI agent platform, Agentforce, now serves over 8,000 customers, and Data Cloud annualized revenue surpassed $1 billion, growing more than 120% year-over-year. However, Citi had previously noted that the actual commercial contribution of Agentforce remains relatively limited in the near term, and demand volatility in the core CRM business warrants attention. Market Outlook: Earnings Guidance as a Key Variable Citi's price target reduction comes just ahead of Salesforce.com's scheduled release of its Q1 FY2027 earnings report, expected in late May. Investors will focus on management's latest updates regarding AI business commercialization progress, cRPO growth trends, and whether the full-year revenue guidance will be maintained. At the time of reporting, Salesforce.com's stock was trading around $214.
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