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Monness, Crespi, Hardt analysts downgraded Salesforce (NYSE:CRM) and Workday (NASDAQ:WDAY) to Neutral from Buy.
The tech sector staged a “generous” rally last week, they noted, which saw Nasdaq 100 close 8.8% higher on the week. Softer-than-expected CPI print for October fueled the rally in risky assets, helping both CRM and WDAY escape from recent lows.
The analysts see “more challenging times” for both companies over the next 12-18 months amid “concerns regarding the severity of this downturn.”
“In the long term, we believe Salesforce is well positioned to capitalize on digital transformation with a strong portfolio of clouds; however, the company has acquired with great fervor, engaged in profligate spending, and we believe the darkest days of this downturn are ahead of us,” the analysts said on CRM.
As far as Workday is concerned, the analysts see more “dark days” despite the company being able to “expand the reach of its cloud platform and pursue a large market opportunity.”
At 09:29 ET (14:29 GMT), Salesforce stock is down 3.2% while Workday shares are trading 3.7% lower.
