Trade Call: Buy CRM as AI Transforms Enterprise Sales
"Number two, Salesforce (CRM) is transforming its enterprise CRM platform with AI-driven decision engines that enhance productivity and lock in customers. Cost discipline, expanding operating margins, and aggressive buybacks are turning Salesforce into a free cash flow machine. In a rate cut cycle, these factors—combined with the integration of AI co-pilots into the platform—make Salesforce an increasingly attractive proposition for long-term investors."
A trade call on Salesforce based on its deep integration of AI into its CRM platform, rigorous cost discipline, and strong cash flow mechanics, which are expected to drive performance in a favorable rate environment.
Salesforce Turnaround Trade Call
"Yeah, the first one may surprise some investors, and that is Salesforce. Um, the ticker symbol here is CRM. At the time I wrote the article, the company had a free cash flow yield of 5.06%. What may surprise people is, okay, so Salesforce is, as a lot of people know, they were spending a lot of money to acquire their customers through acquisitions which was eating away at their free cash flow. But now that cycle's turned around and they've got enough subscribers coming in, reporting over $10 billion in revenue with 9.7 billion from recurring revenue. Analysts love the stock; they have a price target for Salesforce of 32523 and that's a 33% gain from where the stock is right now."
The speaker highlights Salesforce's turnaround based on improved free cash flow and strong recurring revenue, noting a bullish price target of 32523, implying a 33% upside within the next 12 months despite the current downtrend.
ITV Sees Potential Upside as Sale Talks Boost Sentiment
"Looking at ITV, shares moving in very much the opposite direction after announcing that it's in talks with the owner of Sky Comcast about the sale of its media and entertainment arm. >> Indeed, shares soaring on the back of this. They jumped about 20% this morning. If this deal goes through, it would leave ITV with their studios unit, which produces Britain's Got Talent, Love Island, and all those guilty pleasures. This could be a real shakeup in the broadcasting space, creating a broadcasting giant."
The commentary on ITV focuses on its recent talks with Sky Comcast, which have spurred a significant share price jump. The potential deal, seen as a shakeup in the broadcasting landscape, adds an element of upside to the stock as it positions itself post-divestiture.
Deckers Outdoor Faces Pressure on Sales Guidance and Brand Diversity
"This is Decker's Outdoor. It's DEK down as much as 12%. Really taking a hit to who this company is, they're the owner of Hoka running shoes, the UGG boots that are all over my house. But it was a miss on sales guidance. So, remember we were just talking about Proctor and Gamble, right? People spent on their goods, but they kind of held back on the footwear, the pricey footwear. Maybe, you know what, I'll hold on to those UGG boots another year, you know, and I won't buy another one this year. Bloomberg Intelligence is saying their forecast could be kind of conservative if the momentum continues. They said Hoka has some room to grow into a multi-billion dollar brand. But for UGG, they said for long-term success, they need more product diversity. They need a better seasonal mix. They kind of need to shake things up. And you saw it when they came out with the UGG sneakers. Everybody went crazy."
Deckers Outdoor (DEK) is under pressure with shares down 12% following a miss on sales guidance. The commentary contrasts consumer spending trends on essentials versus discretionary footwear, noting concerns over product diversity and the need for a refreshed seasonal mix in brands like UGG. Bloomberg Intelligence suggests cautious potential for growth if momentum builds in certain segments.
Doubts on Salesforce 2030 Guidance and Management Track Record
"But the stock is finally going up because the company has issued 2030 guidance. Now, back in 2022 they issued guidance for 2026 and here we are in 2026 guiding for 41 billion. We are nowhere close to the guidance they gave back in 2022. So, if they could not meet their 2022 guidance for 2026, not even get close to it, why should we trust the 2030 guidance? I I'm personally not going for it. I I'm not trusting it. Maybe this time is different. But again, it's hard to trust the management team that has disappointed over and over and over again."
The speaker expresses skepticism about Salesforce's 2030 guidance given its history of missing previous targets. He highlights that despite recent positive movements, the management's track record makes him reluctant to invest, suggesting that he will avoid adding to his position in CRM.
Valuation Attraction at 15x Free Cash Flow Amid Caution
"Now if we look at where this business is trading at, it's trading at 15 times cash flow. This is almost a value investment. I've seen articles saying that Salesforce right now is a value stock. Maybe it's not a value investment, but it's getting cheap, guys. I mean, 15 times cash flow for Salesforce is really crazy. It used to trade at 55 times a few years ago and a few months ago it was around 22-25 times. At 15 times, to me this is very interesting. Assuming they hit a 10% revenue growth, the free cash flow yield of around 6% could translate to a 15 to 16% annual return, with potential for a multiple reversion to 18-20 times."
The speaker notes that Salesforce is now trading at an attractive 15 times free cash flow, a significant reduction from previous multiples. Despite his reservations about management, he outlines a scenario where sustained organic growth and potential multiple expansion could deliver substantial annual returns, though he remains cautious due to historical performance issues.
Salesforce rebounds with strong fundamentals despite trust issues
"Salesforce stock is going up. When I look at Salesforce, we can look at it in my portfolio. It's now down $1,800, down 3%. At one point I was down around $10,000 in Salesforce, but we're almost moving back up into the green. They laid out a very bold vision at Dreamforce and provided guidance that is very positive, suggesting that the fundamentals are moving upwards."
The speaker notes a recent rebound in Salesforce (CRM), citing strong earnings guidance and a bold vision from their Dreamforce conference, despite lingering trust issues and past underperformance. The turnaround in portfolio performance is emphasized as a positive signal.
Company Commentary on Salesforce
"Now, another company that I'm focused on, but I haven't bought today, is Salesforce. Salesforce just had their Dreamforce convention where they outlined aggressive plans to reacelerate organic growth back to over 10%. They also showcased a slide indicating operating margins could double from 17% to 34% and free cash flow could jump from $4 billion to $14 billion by 2025, with 99% returned to shareholders via buybacks or dividends. Even though this has been my worst performer, I'm still going to hold it because I believe there is far more upside than downside in this company, and I could see it easily moving into the $330 range."
The host provides a detailed commentary on Salesforce, noting its impressive forward-looking metrics such as margin expansion and free cash flow growth. Despite underperformance, he remains committed by holding the stock, anticipating that upcoming growth catalysts could drive the share price into the higher range.
Salesforce Partnership Backfires
"Now, moving on, we get to the news. And this is somewhat comical, Id say disappointing, but also comical news about Salesforce. This stock is so hated by the market. As noted by this latest news, Salesforce is expanding its AI partnership with OpenAI and Anthropic, integrating their latest models into Agent Force 360, including deeper ChatGPT and cloud integrations to accelerate AI agent adoption. In this case, after Salesforce announced this partnership with OpenAI, the stock went down. How does a stock go down after you partner with OpenAI? Thats almost impossible. I should be giving them an award for accomplishing the impossible. This should be considered one of the fail of the weeks."
The speaker highlights an anomaly with Salesforce, noting that despite expanding its AI partnerships—a typically positive catalyst—the stock dropped. He underscores that the market sentiment toward Salesforce is extremely negative, describing the move as a "fail of the week."
LVMH Unexpected Sales Growth Boosts Luxury Sector
"LVMH surging almost 14% higher in Paris now and a wider rally too in the luxury sector. Tell us more. Indeed. Yeah. So essentially this is an unexpected return to sales growth. They had their third quarter results this morning. Stronger than expected performance across the board and essentially analysts are saying this is an encouraging trend. So um you know it it's a it's an improvement in relation to the wider sector. They're suggesting that it's a return to growth could be possible next year. they're citing quite a confident tone for 2026 and notably um as part of these kind of encouraging trends notably in China which is which is a key market for LVMH and as you say it led to peers also surging so the likes of Burberry caring also far higher um across the board so shares in LVMH rising on that unexpected positive news a step in the right direction."
The speaker highlights LVMH's unexpected sales growth as a catalyst for a rally in the luxury sector, noting strong Q3 results and growth potential driven by key markets like China, suggesting a positive outlook for next year.