Oppenheimer raises Salesforce's price target by 12.5%

Oppenheimer Equity Research raised on Thursday the price target for Salesforce.com (NYSE:CRM), the customer-management platform, by 12.5% to $180 because of positive trends in the business and partnerships with major companies such as Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) among others.

“Salesforce.com management provided an upbeat set of presentations at yesterday’s analyst meeting,” a research note to clients by Koji Ikeda, Brian Schwartz and Tyler Page wrote. They reiterated a rating of Outperform for Salesforce. “We found the company’s product updates, partnership news with Apple and Amazon, and overall commentary on the strategy, business trends and opportunities, as positive.”

Shares of Salesforce were flattish at $159.51 in Thursday’s premarket, having closed slightly lower on Wednesday at $158.33. 

READ: ‘Use any near-term pullbacks to accumulate’ Salesforce stock, says Wedbush, while raising price target on stock to US$170

“Bottomline, Salesforce.com looks well positioned for good customer acquisition and better monetization activity on its large installed base because of the powerful experience management, digital transformation and cloud computing modernization waves that are permeating the worldwide enterprise market,” they concluded.

The upside scenario for the company is that organic growth reaccelerates, operating margins expand at a faster rate, and renewal rates improve, the report said. The downside risks are that growth slips below 20% and this causes the valuation multiples to rerate lower, a failure to show operating margin expansion, and higher churn trends.

“We expect the positive business momentum to continue for Salesforce.com over the next several quarters buoyed by the increasing demand and market adoption of cloud services, modern customer experience technologies, voice and artificial intelligence, from a refreshed product portfolio, and strong IT demand for data integration and analytics,” the report concluded.

Salesforce is one of the world’s premier platforms for customer relationship management that companies use to efficiently manage their operations.

Story by ProactiveInvestors