12:39 PM EDT, 08/22/2024 (MT Newswires) -- Salesforce ( CRM ) faces mixed business trends, with "durable" margin improvement and earnings per share growth expected in fiscal Q2 amid a tough operating environment, Oppenheimer said in a note Thursday.

Pipeline momentum remains healthy, particularly for data cloud, industry solutions, and platform technologies, and the stock trades at deep discount multiples versus peers, implying that investor expectations are low, according to the note.

"The good news is that the estimates bar looks low enough for Salesforce ( CRM ) to overcome in the reported results given macro stability this quarter, better seasonality ahead, and management's lowered revenue guidance last quarter," analysts said in the note.

Despite the challenging operating environment, Salesforce ( CRM ) is expected to maintain low estimate risks for the current quarter, with a durable margin growth story supported by multi-product adoption, AI investments, sales efficiency improvements and cost discipline, the investment firm said.

Risks to Salesforce's ( CRM ) business include slower customer hiring and potential seat compression from generative AI technologies as well as uncertainty around product availability, pricing models, total cost of ownership, and ROI for the company's new AI and Data Cloud offerings, the analysts said in the note.

Oppenheimer maintained an outperform rating on Salesforce ( CRM ) with a $280 price target.

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