Citi has reduced its 12-month price target on Salesforce to $188 from $200 but kept a Neutral stance as it prepares for the company's upcoming first-quarter results. The bank said checks with three Salesforce partners pointed to a slowdown in deal activity and intensifying competitive pressures across certain product areas.
According to Citi's field work, resellers reported longer deal cycles and an increased emphasis on portfolio optimization at renewal time. Those dynamics were particularly pronounced in Tableau and Marketing Cloud, the bank said, where partners flagged customers taking more time to decide and scrutinizing existing spend during renewals.
Competition from peers such as HubSpot and Adobe was highlighted in the bank's note as a growing headwind. Citi also observed that Agentforce - Salesforce's AI platform - remains the dominant topic in customer conversations but has not yet converted into substantial adoption or scale.
Citi attributed the slow adoption of Agentforce in part to the "unpredictability of cost being a main hurdle," which it said is limiting customers' ability to scale the product. The bank also noted that contract durations are shortening amid uncertainty tied to AI-related investments.
On Tableau specifically, Citi reported that partners increasingly view the analytics product as vulnerable to disruption. Reflecting that view, the bank now models a 2% to 5% revenue decline for Tableau in fiscal years 2027 and 2028 - a forecast roughly 10 percentage points lower than its prior expectations. Citi warned that deterioration in Tableau and MuleSoft performance "may be overlooked by the Street."
For the first quarter, the bank expects Salesforce's results to come in broadly in line with or marginally below company guidance. Citi projects organic current remaining performance obligation growth of about 9% in constant currency for the quarter. The note said Citi does not expect management to raise full-year fiscal 2027 targets and anticipates second-quarter guidance will show modest deceleration.
The adjusted $188 target reflects an implied roughly 12 times enterprise value-to-free cash flow multiple on Citi's fiscal 2027 estimates. Citi retained Neutral while trimming its target, signaling caution ahead of the company's near-term reporting and commentary.