Latest news with #M&A
Globe and Mail
7 hours ago
- Business
- Globe and Mail
Salesforce's (CRM) $8Bn Informatica Acquisition Shakes Up AI Race
The market response to Salesforce's (CRM) recent $8 billion acquisition of Informatica is mixed. This move marks Salesforce's latest effort to strengthen its AI capabilities, particularly within its Agentforce platform. However, the company has faced criticism over past large acquisitions, like Slack, that didn't fully meet expectations. Reflecting this cautious sentiment, the stock's reaction to the announcement has been lukewarm at best. Confident Investing Starts Here: All in all, there are upsides and downsides to deals this size, leaving me cautiously optimistic on Salesforce's most recent splurge. Salesforce's Acquisition Strategy Under the Microscope For those unfamiliar, Salesforce is a leader in customer relationship management (CRM) software. The company has a track record of high-profile acquisitions, including Tableau for $15.7 billion in 2019, MuleSoft for $6.5 billion, and Own Company for $1.9 billion in 2024. In 2023, activist investors criticized Salesforce's aggressive acquisition strategy, urging the company to focus more on profitability and scale back on large deals. Since then, Salesforce has moderated its M&A activity, now targeting only acquisitions that align closely with its strategic goals. An Unlikely Match Made in AI Heaven Salesforce's acquisition of Informatica was initially unexpected, especially after the deal collapsed in April 2024 when the price was pegged at $11 billion. However, the two parties eventually reached an agreement, leading to the current deal. This acquisition comes as Salesforce's growth has slowed, shifting from years of double-digit gains to more modest single-digit increases. Informatica is widely regarded as a leader in AI-powered enterprise cloud data management, serving over 5,000 clients across numerous countries. This acquisition should help Salesforce strengthen its AI capabilities, particularly in automating and improving data preparation, quality, and governance. Salesforce is no stranger to AI—its Agentforce platform uses generative AI to create autonomous agents that handle complex tasks such as coaching sales reps and automating quoting processes without human involvement. Integration Challenges and Potential Pitfalls Make no mistake, this acquisition also has a clear financial motive: to reignite growth, a common playbook for large tech companies facing slowing organic expansion. However, this approach doesn't always yield the desired results. Informatica was a substantial company on its own, and merging two large organizations is a complex, time-consuming process that can take years. Consider Salesforce's previous integration challenges, like with Slack's ambitious 'Digital HQ' vision. Additionally, Informatica's appeal partly stemmed from its neutrality—it was platform-agnostic across various multi-cloud and multi-vendor environments. Customers might resist if Informatica is perceived merely as a gateway into the Salesforce ecosystem. Cultural clashes are another potential hurdle, something Salesforce knows well from past experiences. Salesforce Boosts Cash Firepower One thing is certain: Salesforce has plenty of cash to deploy. The company generated $13.1 billion in operating cash flow in fiscal year 2025 and projects $14.5 billion for fiscal year 2026. As the following chart shows, Salesforce has clearly made cash generation a top priority in recent years. Is Salesforce a Buy, Sell, or Hold? On Wall Street, CRM sports a Moderate Buy consensus rating based on 27 Buy, eight Hold, and two Sell ratings in the past three months. CRM's average price target of $349.09 implies an upside potential of 26.5%. Following Salesforce's Informatica acquisition, Bank of America Securities analyst Bradley Sills issued a Buy rating on CRM with a price target of $350. He believes the reasonably priced deal will enhance Salesforce's data capabilities. Regarding near-term financial implications, the analyst believes 'the acquisition is anticipated to be accretive to Salesforce's non-GAAP operating margin and free cash flow starting in the second year post-closing.' However, not everyone on Wall Street is as confident in the deal as Sills. DA Davidson expressed caution, noting 'Informatica's suboptimal execution track record and legacy technology offerings.' Cautious Optimism for Salesforce's Future The market's cautious reaction to Salesforce's latest acquisition is understandable, but a closer look shows the deal makes strong strategic and financial sense. The Informatica purchase accelerates Salesforce's AI capabilities and strengthens its position against other tech giants. It's also expected to improve operating margins and enhance growth prospects. That said, there are key challenges to monitor in the coming years. Salesforce must successfully integrate Informatica while preserving its reputation as a platform-agnostic data provider. Additionally, blending the two companies' cultures will be crucial to sustaining innovation, a reality often overlooked by investors but vital in business. While relying on M&A to drive growth isn't always ideal, it's sometimes necessary. To borrow a baseball analogy, Salesforce may look great 'on paper,' but we won't truly know how this deal plays out until the team has spent some time 'on the field.'
TechCrunch
15 hours ago
- Business
- TechCrunch
Last day to vote on the Disrupt 2025 agenda lineup
We're thrilled by the overwhelming response to our call for speakers at TechCrunch Disrupt 2025, taking place October 27–29 at Moscone West in San Francisco. After a careful selection process, we've narrowed it down to 20 impressive finalists—10 breakout sessions and 10 roundtables. Now it's your turn to help shape the agenda. Audience Choice voting is open until 11:59 p.m. PT tonight. This is your final opportunity to weigh in—vote for your favorite sessions and help decide which will take the stage. You can vote for as many sessions as you'd like—just one vote per session. The top 5 in each category will join the official Disrupt 2025 lineup. Meet the finalists Breakout Sessions How to Get Acquired in Tech (Without Selling Out): M&A Tips for Founders and Builders Aklil Ibssa, Head of Corporate Development and M&A, Coinbase Agentic AI for Startups: Automate, Adapt, and Accelerate Growth Anmol Rastogi, Head of Product, Amazon Business – AI & ML, Amazon Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you've built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | REGISTER NOW Automation with Agents: From Work Enablement to Work Completion Chet Kapoor, Chairman and CEO, DataStax AI at the Brink: Strategic Playbook for National Security Dan Hendrycks, Executive and Research Director, Center for AI Safety (CAIS) Leading a Series A Round in 2025 and Sustaining Momentum Gabriel Kra, Managing Director, Prelude Ventures The Agentic Apocalypse: Securing the Enterprise in the Age of 1 Billion AI Agents Jack Hidary, CEO, SandboxAQ Jim Breyer, Founder and CEO, Breyer Capital Embracing AI for a Better Digital Future Matt Madrigal, Chief Technology Officer, Pinterest Mining for Millions with GenAI's 4 Ds: Striking Trust, Delight, and Dividends Michael Stewart, Managing Partner, M12 From Data to Agents: Building the AI-Native Enterprise Sridhar Ramaswamy, Chief Executive Officer, Snowflake From Vibes to Velocity: How AI Tools Can Help You Achieve Your Development Goals Tim Rogers, Staff Product Manager, GitHub Copilot, GitHub Roundtable Sessions Future of Space Economy in the Low Earth Orbit Abhijeet Kumar, Invited Lecturer – New Space Economy, UC Berkeley | Tech and Strategy Lead, Archer From Startup to Scale-Up: A GTM Blueprint Anjai Lal, Head of Strategy and Enablement, Google Cloud From Code to Capital: How VCs Spot the Next AI Powerhouses Avi Bharadwaj, Investment Director, Intel Capital The Winning Formula: Turning Your Business Into a Trusted, Scalable Community To Drive Growth Justine Palefsky and Tasneem Amina, Co-founders, Kindred Vlad Loktev, Partner, Index Ventures How to Train Your Model: Taming AI Agents Without Breaking Them Kyla Guru, Head of Model Cyber Policy, Anthropic Alex Moix, Investigations Lead, Safeguards, Anthropic Going a Layer Deeper: Why the future of AI investments lies with infrastructure and applications Paul Drews, Managing Partner, Salesforce Ventures Scaling Search and AI for Millions: Lessons from Reddit Search Rachel Miller, Product Manager, Reddit AI Evaluation 101: Addressing Challenges to Real-World AI Applications Rohit Patel, Director, Generative AI, Meta From Workarounds to Breakthroughs: How UpLink Lets Users Connect Any App—No Integration Needed Scott Weinert, CTO and Co-founder, Atomic Whose Company Is It, Anyway?: What You Lose When You Accept Outside Capital Sridhar Vembu, Chief Scientist, Zoho
Yahoo
20 hours ago
- Business
- Yahoo
1 Mid-Cap Stock with Solid Fundamentals and 2 to Question
Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo. These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one mid-cap stock with massive growth potential and two that may have trouble. Market Cap: $24.7 billion Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE:EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men's grooming. Why Do We Pass on EL? Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin Sales were less profitable over the last three years as its earnings per share fell by 35.3% annually, worse than its revenue declines Estée Lauder's stock price of $68.60 implies a valuation ratio of 31.5x forward P/E. To fully understand why you should be careful with EL, check out our full research report (it's free). Market Cap: $14.15 billion Founded in 1926, Graco (NYSE:GGG) is an industrial company specializing in the development and manufacturing of fluid-handling systems and products. Why Do We Think Twice About GGG? Flat sales over the last two years suggest it must find different ways to grow during this cycle Flat earnings per share over the last two years underperformed the sector average Eroding returns on capital suggest its historical profit centers are aging Graco is trading at $84.67 per share, or 28x forward P/E. Check out our free in-depth research report to learn more about why GGG doesn't pass our bar. Market Cap: $21.02 billion Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform. Why Could PINS Be a Winner? Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 10.4% annually over the last two years Healthy EBITDA margin of 27% shows it's a well-run company with efficient processes PINS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders At $30.98 per share, Pinterest trades at 17.1x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
Globe and Mail
2 days ago
- Business
- Globe and Mail
Morgan Stanley Shares Rise 10.5% in a Month: Should You Buy the Stock?
Over the past month, shares of Morgan Stanley MS, a leading global investment bank, have risen 10.5%. The stock has outperformed the S&P 500 index, the Zacks Finance sector and the industry. Meanwhile, it has underperformed its close peer, Goldman Sachs GS, while outperforming JPMorgan JPM. Morgan Stanley's One-Month Price Performance However, lingering uncertainty around tariff policies continues to pose risks. Given this backdrop, let's assess whether Morgan Stanley stock is a lucrative bet or not. Delay in IB Rebound to Hurt Morgan Stanley Entering 2025, a major rebound in mergers and acquisitions (M&As) was expected, with deal-making activities likely to grow in the mid-20s. This optimism stemmed from pent-up demand, stabilizing or declining interest rates, tightening credit spreads, and strong public market valuations. Also, the Trump administration was regarded as more business-friendly, with an expected rollback of stringent oversight that could mark the end of the prolonged regulatory scrutiny. None of these has transpired till now. Deal-making activities have been muted as ambiguity over the tariff and ensuing trade war has resulted in extreme market volatility. These developments have led to economic uncertainty, data indicating a slowdown/recession in the U.S. economy, and rising inflationary pressure. Amid such a backdrop, companies are rethinking their M&A plans despite stabilizing rates and having significant investible capital. The Morgan Stanley management expects M&A and underwriting activities to pick up in the second half of 2025, impacting its M&A advisory fees in the near term. Further, the delay in M&A rebound will impact other IB firms, including JPMorgan and Goldman Sachs, which generate billions in revenues from M&A advisory fees. Morgan Stanley's Revenue Diversification Efforts MS has lowered its reliance on capital markets for income generation. The company's focus on expanding its wealth and asset management operations and strategic acquisitions, including Eaton Vance, E*Trade Financial, and Shareworks, is a step in that direction. These moves have bolstered its diversification efforts, enhanced stability and created a more balanced revenue stream across market cycles. Both businesses' aggregate contribution to net revenues jumped to more than 55% in 2024 from 26% in 2010. For the first quarter of 2025, the aggregate contribution to net revenues was 50.3%. In the first quarter, Morgan Stanley witnessed net outflows of $13.6 billion in the Investment Management division because of volatile markets. On the other hand, assets under management or supervision grew 9.4% year over year to $1.6 trillion as of March 31, 2025. Further, the Wealth Management division's total client assets rose 9.5% on a year-over-year basis to $6 billion. Morgan Stanley's Strategic Alliance Driving Growth Morgan Stanley's partnership with Mitsubishi UFJ Financial Group, Inc. MUFG is expected to continue supporting its financials. In 2023, the companies announced plans to deepen their 15-year alliance by merging certain operations within their Japanese brokerage joint ventures. The new strategic alliance involves combined Japanese equity research, sales and execution services for institutional clients at Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities. Also, their equity underwriting business has been rearranged between the two brokerage units. These efforts will solidify the company's position in the lucrative Japanese market. This helped MS to achieve record equity net revenues in the first quarter of 2025, particularly in Asia, through outperformance in prime brokerage and derivatives driven by solid client activity amid heightened volatility. Further, the company's Asia region revenues jumped 34.5% year over year to $2.35 billion during the quarter. Morgan Stanley's Robust Balance Sheet As of March 31, 2025, Morgan Stanley had a long-term debt of $297 billion, with only approximately $23 billion expected to mature over the next 12 months. The company's average liquidity resources were $351.7 billion as of the same date. Moreover, the company enjoys investment-grade long-term credit ratings of A1, A-, and A+ from Moody's, S&P Global Ratings, and Fitch Ratings, respectively, and a stable outlook allows easy access to the debt market. Thus, a solid balance sheet position supports its enhanced capital distributions. Following the 2024 stress test results, the company announced an increase in its quarterly dividend by 8.8% to 92.5 cents per share . The company also reauthorized a new multi-year share repurchase program of up to $20 billion, effective the third quarter of 2024 and with no expiration date. As of March 31, 2025, approximately $17.5 billion worth of shares remained available under the authorization. Mixed Analyst Sentiments for Morgan Stanley Over the past month, the Zacks Consensus Estimate for 2025 earnings has been revised marginally downward to $8.58. Nonetheless, the consensus estimate for 2026 earnings has been revised marginally upward to $9.27. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Morgan Stanley's 2025 and 2026 earnings implies year-over-year growth of 7.9% and 8.1%, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Morgan Stanley's Premium Valuation The MS stock is currently trading at a forward 12-month price/earnings (P/E) of 14.39X. This is above the industry's 13.64X, reflecting a slightly stretched valuation. Price-to-Earnings F12M On the other hand, JPMorgan and Goldman Sachs have a forward P/E of 14.07X and 13.54X, respectively. This reflects that Morgan Stanley is expensive compared to its peers. How to Play Morgan Stanley Stock Now Morgan Stanley's strong global presence and strategic focus on stable revenue streams provide a solid foundation for organic growth. Its diversified business model ensures resilience and growth potential, even in volatile market conditions. Resilient M&A pipelines and solid trading revenues are other positives. However, the company has been witnessing a rise in expenses. Though expenses declined in 2022, the metric witnessed a five-year (ending 2024) CAGR of 7.8%. The rising trend continued in the first quarter of 2025. Expenses are likely to remain elevated given higher compensation costs, inflationary pressure and inorganic growth efforts. Further, the likelihood of a significant IB rebound this year remains low amid concerns regarding tariff policies, making MS stock a cautious bet. Additionally, the stock's premium valuation and mixed analyst sentiment warrant careful consideration before investing. Current shareholders may benefit from holding for strong long-term returns, while potential investors should wait for greater macroeconomic clarity before taking a position. Morgan Stanley currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report Mitsubishi UFJ Financial Group, Inc. (MUFG): Free Stock Analysis Report
Reuters
2 days ago
- Business
- Reuters
Goldman Sachs says deal outlook is good, but timing is uncertain
NEW YORK, May 29 (Reuters) - Goldman Sachs President John Waldron said on Thursday that the outlook for investment banking remains "quite good." The bank's pipeline for deals worldwide is strong despite uncertainty over timing as U.S. tariff policies roil markets and stall activity, he told investors at a conference. "Our investment banking business is very strong, and I think the outlook remains quite good," Waldron said. "The pipeline is strong all over the world... but as we've already said, the element of volatility makes it hard" to predict when deals will materialize. Corporate clients have a positive bias toward transactions and are still holding discussions about mergers, acquisitions and raising capital, Waldron said. Despite a broader slump in M&A, he cited a 30% increase in large deals valued at more than $500 million in the year to date as evidence of the market's resilience. "Obviously in the second quarter it's been much slower than in the first... Nonetheless, even post-Liberation Day, we've worked on a number of very sizeable, important M&A transactions."
