BRZE Stock Gets Multiple Downgrades After $5.66B Salesforce Deal — Analysts See Shareholder Win, Potential Boost For Software Valuations

Stifel called the roughly 58% acquisition premium a win for Braze shareholders, while Wells Fargo sees broader implications for software valuations.

• Wells Fargo downgraded Braze to ‘Equal Weight’ from ‘Overweight’, but raised its price target to $47.50 from $45, citing a favorable deal outcome.
• Stifel downgraded Braze to ‘Hold’ from ‘Buy’ while lifting its price target to $47.50 from $35.
• Piper Sandler also downgraded Braze to ‘Neutral’ from ‘Overweight’ following Salesforce's agreement.

Braze Inc. (BRZE) received downgrades from multiple firms on Tuesday following Salesforce Inc.'s (CRM) agreement to acquire the customer engagement software company for approximately $5.66 billion in enterprise value.

BRZE stock surged more than 50%, hitting a 20-month high, even as Piper Sandler, Wells Fargo, Loop Capital and Stifel lowered their ratings following the announcement.

Analysts See Shareholder Win, Broader Software Implications

In a note to investors cited by TheFly, Wells Fargo downgraded Braze to ‘Equal Weight’ from ‘Overweight’, but raised the price target to $47.50 from $45. According to The Fly, the brokerage said Braze investors would likely welcome the acquisition. 

The firm viewed increased deal activity as positive for the broader software sector, potentially helping investors address questions about long-term valuations.

Stifel downgraded Braze to ‘Hold’ from ‘Buy’, while lifting its price target to $47.50 from $35. The firm described the approximately 58% acquisition premium as “a win for Braze shareholders,” noting that the offer values the stock at its highest level since March 2024.

Piper Sandler analyst Billy Fitzsimmons also downgraded Braze to ‘Neutral’ from ‘Overweight’ following the acquisition agreement, per TheFly. Loop Capital analyst Yun Kim also downgraded Braze to ‘Hold’ from ‘Buy’, raising the price target to $47.50 from $40. 

Meanwhile, Jefferies said the acquisition could “re-energize” Salesforce's Marketing and Commerce Cloud business and strengthen its competitiveness against Adobe (ADBE). The firm maintained a ‘Buy’ rating and $300 price target on Salesforce.

Evercore Flags Salesforce Deal Price, M&A Pace

Evercore ISI said the rationale behind Salesforce's acquisition of Braze makes sense, given the latter's fast-growing consumer engagement business, but warned that the timing and price were “likely to be a bit of a debate,” according to The Fly.

The firm noted that the $47.50 per share offer represents a roughly 58% premium to Braze's previous closing price of $30.04, and approximately 80% above its 30-day average share price.

However, Evercore also warned that Salesforce's recent pace of acquisitions could concern value-focused investors, while identifying ServiceNow (NOW) as a potential beneficiary of investor fund flows. The firm maintained an ‘Outperform’ rating and $290 price target on Salesforce.

Braze's Growth Drew Analyst Support Before Deal

Before the acquisition announcement, several analysts had maintained positive ratings on Braze following its quarterly results and annual Forge conference.

Braze's U.S. revenue rose 27.2% year over year to $125.6 million in its fiscal second quarter (Q2), while international revenue increased 24.9% to $101.7 million, according to its Form 10-Q.

Following Forge, DA Davidson maintained a ‘Buy’ rating and $40 price target, citing customer and partner feedback about replacing incumbent marketing platforms, According to Investing.com, Cantor Fitzgerald reiterated ‘Overweight’ with a $38 target, 

Citizens maintained ‘Market Outperform’ with a $35 target, pointing to encouraging customer spending plans. Raymond James had also maintained an ‘Outperform’ rating with a $33 target following Braze's September earnings report.

What Comes Next

The transaction is expected to close in Salesforce's fiscal 2028, subject to Braze shareholder approval and regulatory clearances. Salesforce (CRM) said it does not anticipate changes to its fiscal 2027 guidance and has not updated its long-term financial targets in connection with the acquisition.

On Stocktwits, retail sentiment around BRZE stock flipped to the ‘bullish’ zone from ‘bearish’ a day ago amid high message volume.

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