Salesforce Shares Plunge 5.8% Amid Insider Selling Activity
Salesforce Inc. (NYSE:CRM) experienced a significant decline in its stock price, dropping by 5.8% during trading on Thursday, following notable insider selling. The company’s shares fell to a low of $234.62 before closing at $241.64. Trading volume surged, with 13,629,540 shares exchanged, representing an 86% increase compared to the average session volume of 7,339,495 shares. The stock had previously closed at $256.45.
The decline follows recent transactions by CEO Marc Benioff, who sold 2,250 shares on September 2, 2023, at an average price of $251.66, totaling $566,235. After this sale, Benioff retained 11,911,571 shares, valued at approximately $2.99 billion, indicating a 0.02% decrease in his ownership. On August 29, he had sold another 2,250 shares for $574,425 at an average price of $255.30, maintaining the same number of shares post-transaction.
Analyst Ratings and Market Reaction
Reactions from analysts have varied, with several adjusting their price targets for Salesforce. Oppenheimer reduced its price objective from $370.00 to $315.00 while maintaining an “outperform” rating. Meanwhile, Royal Bank of Canada lowered its target from $275.00 to $250.00 and assigned a “sector perform” rating. KeyCorp also revised its target from $440.00 to $400.00, maintaining its “overweight” rating.
Overall, analysts have a mix of outlooks on the stock. One analyst rates it as a “Strong Buy,” twenty-five rate it as a “Buy,” ten assign a “Hold,” and one rates it as a “Sell.” According to MarketBeat, Salesforce holds a consensus rating of “Moderate Buy” with a price target of $331.34.
Financial Performance and Future Guidance
Salesforce reported its quarterly earnings on September 3, 2023, revealing earnings per share of $2.91, exceeding the consensus estimate of $2.78 by $0.13. The company achieved a revenue of $10.24 billion for the quarter, surpassing analyst projections of $10.14 billion. This represents a 9.8% increase compared to the same period last year when it reported earnings per share of $2.56.
Looking ahead, Salesforce has set its fiscal year 2026 guidance at earnings per share between $11.330 and $11.370, with third-quarter guidance ranging from $2.840 to $2.860.
The company also announced a quarterly dividend of $0.416, scheduled for payment on October 9, 2023. Shareholders on record by September 17, 2023 will receive this dividend, which equates to an annualized rate of $1.66 and a yield of 0.7%.
Institutional Investment Trends
Recent trading patterns indicate a mix of actions among institutional investors. Coign Capital Advisors LLC increased its stake in Salesforce by 1.7% during the first quarter, bringing its total holdings to 2,183 shares valued at $586,000. Similarly, Staley Capital Advisers Inc. raised its position by 1.1%, now owning 3,343 shares valued at $897,000.
Other investors, including KDT Advisors LLC and Liberty One Investment Management LLC, have also adjusted their holdings, reflecting the broader trend among institutional investors who collectively own 80.43% of Salesforce’s stock.
As Salesforce navigates this challenging market environment, its ability to respond to both insider selling and analyst scrutiny will be pivotal in maintaining investor confidence and market performance.
