Analysts at Morgan Stanley upgraded Salesforce (NYSE:CRM) shares from Equal-Weight to Overweight and raised the price target by $60 to $350 per share.

The bank cited low investor expectations versus potential revenue growth drivers as key reasons for this upgrade. The analysts pointed out that these drivers include price increases, product bundling, and adoption of the Data Cloud, all contributing to an attractive risk/reward profile for Salesforce.

They also noted Salesforce's significant outperformance in 2023 compared to its large-cap software peers, attributing this to a substantial improvement in the company's profitability outlook. Specifically, the analysts highlighted an over 800 basis points year-over-year expansion in operating margin.

While much of the recent margin growth is believed to be behind, Morgan Stanley identified several factors that could lead to potential top-line growth, exceeding the conservative expectations of investors. These factors are the effective implementation of recent price hikes, new bundled solutions enhancing the sales process, and the Data Cloud service, which helps customers leverage their data for Generative AI applications.