: Salesforce stock drags down Dow after CEO news, lack of guidance for next fiscal year

by | Dec 1, 2022 | Stock Market

Salesforce Inc.’s stock is on pace for its largest drop in a year and is the worst-performing stock on the Dow Jones Industrial Average on Thursday after the surprise announcement that co-Chief Executive Bret Taylor is leaving the company next month, along with reporting slower growth and plenty of uncertainty. Salesforce
CRM,
-8.35%
stock was down almost 10% to $144.89 in intraday trading Thursday, a day after reporting third-quarter results that beat expectations but issuing a lower-than-expected fourth-quarter forecast. Also, Taylor said he has decided to depart the company, leaving co-CEO Marc Benioff in the sole CEO role at the end of January.

In addition, the cloud-software company did not issue guidance for fiscal year 2024, with Chief Financial Officer Amy Weaver saying on the earnings call Wednesday that it would be “premature” and that she will do so next quarter instead. “We are experiencing a very unpredictable macro environment as our customers are working to ensure their businesses are also healthy for the long term,” Weaver said. “Compounding that dynamic is an unprecedented foreign currency market.” Some analysts said that’s a reason to worry. “The omission is glaring relative to peer companies that chose to guide for next fiscal year even despite not having this practice,” wrote John DiFucci, analyst for Guggenheim Securities, in a note to clients. “It’s almost as glaring as the unexpected departure of Co-CEO and Vice Chair Bret Taylor… Without the expected initial FY24 guidance, it makes us (and likely others) wonder if more serious problems are brewing under the surface.” Guggenheim is neutral and has a $150 price target on the stock. Mark Moerdler, a Bernstein analyst, echoed those concerns …

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