Low expectations with spreads at BBB levels; Initiate at Overweight

Research evidence excerpt

Low expectations with spreads at BBB levels; Initiate at Overweight

Accessible version

Salesforce Inc

Low expectations with spreads at BBB

levels; Initiate at Overweight

Initial Opinion - Credit

Initiate coverage at Overweight 18 June 2026

We initiate coverage on Salesforce (CRM) at Overweight as we believe bond valuations High Grade Credit

overly discount its increased leverage profile and AI disruption risk, while giving little United States

credit for improvement in revenue growth in 2H and/or agentic AI revenue potential. We Technology

prefer the long end, with 10s30s at +47 bp steep, among the widest in IG TMT, similar Tom Curcuruto, CFA

to Oracle, Comcast and Meta. With CRM (A2/A+) spreads ~77 bp behind the 15Y+ Research Analyst

Single-A US IG Corp ICE Index, and 15/37 bp wide of peer, ServiceNow in 10/30Y, we BofAS+1 646 855 6870

believe the discount comprises concerns about both AI disruption and leverage. While tom.curcuruto@bofa.com

spreads also imply some risk of another ASR and/or large M&A, we view these as less Gabriel Vieira

Research Analyst

likely near term. Altogether, CRM trades 40 bp wider than the 15Y+ BBB Index and BofAS

several BBB-rated TMT structures, which we view as too wide. We expect spread upside gabriel.vieira@bofa.com

from improved execution and/or sentiment. The key near term catalyst is revenue

growth acceleration in 2H, beginning with the 3Q period ending in Oct, with a trough Salesforce Inc (CRM)

expected in 2Q. Key Data 2025A 2026A 2027E

Operating (US$ mm)

Revenues 37,895 41,525 46,189Levered share buybacks: one and done, in our view

CRM’s $50B buyback authorization, including the $25B ASR, followed management’s Adj. EBITDA 11,143 12,620 13,846

view that the balance sheet was “very under-leveraged” and not using debt effectively.