Salesforce upgraded on historically low valuation: 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Salesforce, Chewy, American Airlines, and MasterCard.

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Salesforce earns an upgrade at Baird

Salesforce (NYSE:CRM) shares rose more than 1% pre-market today after Baird upgraded the company to Outperform from Neutral and raised its price target to $300.00 from $240.00, as reported in real-time on InvestingPro.

The analysts highlighted the company's strong performance last year, fueled by its effective margin delivery, which was previously underestimated. With the company’s current valuation at approximately 25 times its next twelve months' FCF, which is near its historical low, and modest expectations for top-line growth (with an anticipated increase of about 11% over the next two years), there is potential for upward movement from its current levels.

Factors contributing to this positive outlook include possible price increases, the potential resurgence of front office spending, and improved sales execution.

Chewy shares gain on Barclays upgrade

Chewy (NYSE:CHWY) shares surged more than 3% pre-market today after Barclays upgraded the company to Overweight from Equalweight and raised its price target to $30.00 from $19.00.

The bank noted that the new price target represents a potential upside of over 40% and highlighted Chewy as a promising candidate for significant returns within the challenging e-commerce sub-sector in 2024.

The analysts anticipate that revenue growth for Chewy will hit its lowest point in the first half of 2024 and then pick up speed in the latter half, driven by stable customer growth and expansion into Canada.

We see upside to consensus over the next few years as high-margin advertising (recognized as a contra-COGS) builds both on and off site, while areas such as vet clinics and insurance could drive further positive revisions longer term as those businesses scale.

Two more upgrades

Jefferies upgraded American Airlines (NASDAQ:AAL) to Buy from Hold with a price target of $18.00 (from $16.00). As a result, shares rose more than 1% pre-market today.

Oppenheimer upgraded Mastercard (NYSE:MA) to Outperform from Perform with a price target of $510.00.

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