Jefferies Analyst Says Salesforce-Informatica Deal Makes Sense: Retail Shares The Conviction

A Bloomberg report said Friday that customer relationship management software company Salesforce, Inc. (CRM) has renewed its interest in Informatica Inc. (INFA) and also broached the possibility of a deal as early as this week.

The rumored development comes a year after Salesforce gave up on its pursuit of Informatica due to the failure to arrive at a common ground regarding the deal terms.

The report also said Citrix Systems-owned Cloud Software Group has also made a competing bid.

Jefferies analyst Brent Thill maintained a ‘Buy’ rating and a $375 price target for Salesforce stock after the Bloomberg report. The analyst noted that the 10% premium to Friday's close implies a deal at 5.1-times forward revenue versus 7.4-times when chatter last circulated in April 2024

Since then, growth has decelerated at Informatica and Salesforce is facing growing pressure to increase adoption of Agentforce, which Informatica could help with, he added.

Jefferies said it believes a deal would make sense, and that the deal price is more attractive now than last year.

On Stocktwits, retail sentiment toward Informatica stock was ‘extremely bullish’ (80/100) by late Monday, with the message volume at ‘extremely high’ levels.

Sentiment toward Salesforce stock was also ‘extremely bullish’ (75/100), with the buoyant  mood accompanied by ‘high’ message volume. 

A bullish user said they expect the deal to be announced Wednesday when Salesforce reports its quarterly results. They see $35 a share as a “nice” price and $30 as a ‘reasonable’ price.

Informatica stock jumped 17.45% to $22.55 on Friday on the report, while Salesforce stock shed 3.63% to $273.13. These shares are down 13% and 18%, respectively, for the year-to-date period.

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