Salesforce stock (NYSE:CRM) suffered on Thursday and dropped over 10% in early trading as traders reacted negatively to the cloud-based business software provider’s exit and co-CEO Bret Taylor’s unexpected resignation.
Since November 2021, Taylor and Marc Benioff, the company’s founders, have shared the top position at Salesforce. Taylor will formally retire at the end of January 2023. Late on Wednesday, Taylor announced on a conference call that he would go back to his “entrepreneurial roots,” although he made no further mention of his intentions.
Taylor was “one of the pillars in the Salesforce (NYSE:CRM) strategy,” according to Wedbush analyst Dan Ives, and Wall Street would consider his departure to be “a bombshell.” Ives stated that it wouldn’t be unexpected to see Benioff “possibly become more active on M&A” in the cloud industry in light of Taylor’s departure from Salesforce (NYSE:CRM).
According to Ives, “this is all about the competition with Microsoft for market dominance in the cloud and collaboration arena.” Ives reduced his price objective for Salesforce’s (CRM) shares from $215 per share to $200 while maintaining his outperform rating.
Taylor’s resignation isn’t the only issue facing Salesforce (NYSE:CRM), which is also dealing with backlash over a tepid fiscal fourth-quarter estimate. The business stated that it anticipates earning between $1.35 and $1.37 per share, excluding special items, on revenue between $7.93B and $8.03B. Salesforce (CRM) was expected to earn $1.34 per share on revenues of $8.03B, according to previous Wall Street analyst predictions.
Salesforce Stock Outlook
The fourth quarter of Salesforce’s (CRM) fiscal year is “important,” according to Stifel analyst Parker Lane, and the company’s expectations as well as broader economic trends, “make it tougher to present an accurate picture” of its overall fiscal year. Lane kept Salesforce’s (CRM) buy rating but lowered his price objective from $185 per share to $175.
Taylor’s resignation was announced together with Salesforce’s (NYSE:CRM) outlook and the company’s third-quarter results, which exceeded analysts’ expectations. Despite Salesforce’s (CRM) mixed outlook, Cestrian Capital Research stated that comments from Benioff show he anticipates simpler days ahead for the business.
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Author Jowi Kwasu 
