Salesforce.com stock will rise because investors are underestimating its long-term growth potential, according to Jefferies.
The back story. Salesforce.com shares (ticker: CRM) have rallied about 8% this year, versus a 19% gain for the Nasdaq Composite. In August, the company reported better-than-expected fiscal second quarter earnings results, but the shares haven’t rallied significantly because of a more-difficult market environment for growth-oriented securities.What’s new. Jefferies analyst Brent Thill assumed coverage for Salesforce.com stock on Monday with a Buy rating. The prior rating was also a Buy. “We believe the CRM story embodies the best characteristics of the software sectors,” he wrote. “We believe the company’s growth profile…is under appreciated by the market.”
The company’s stock was down 0.9% to $147.50 near midday Tuesday. The Dow Jones Industrial Average was down 1.2%
The analyst cited Salesforce.com’s consistent financial performance and strong position in the cloud-software industry. He estimates that the total market for the company’s business will rise to $140 billion in 2022. Thill forecasts Salesforce.com can increase its sales 19% annually through fiscal 2023.
Looking ahead. The analyst has a $171 price target for Salesforce.com stock.
Via Barrons