UBS Reiterates Buy on (CRM) Following 2Q Report

September 1, 2016 9:40 AM EDT
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Price: $75.64 --0%

Rating Summary:
    51 Buy, 7 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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UBS reiterated a Buy rating and $100.00 price target on (NYSE: CRM) following the company's 2Q earnings report. CRM raised 2017 revenue guidance to $8.275-8.325Bn vs. prior guidance of $8.26-8.32Bn. UBS adjusted 2017 revenue estimates to $8,325 from 8,269M.

Analyst Brent Thill commented, "After 2 monster qtrs. in Q4 & Q1, a mixed FQ2 was a small shock to everyone. 2 factors were at play, and we think both are transitory and will be overcome. 1) FX headwinds increased, but FY17 was still raised on a strong deal pipeline. 2) U.S. was soft late in Q2, and some deals slipped though were not lost; mgmt already made adjustments and Q3 guide embeds some conservatism in our view. With stock down 7% in AH (to $74.05), we believe it creates a good entry point for LT investors for these reasons: 1) EV/S multiples of 5.7x NTM & 5.2x CY17 are merely avg for the SaaS comp group despite above avg characteristics; 2) EV/S is below 10-yr historical avg of 6.0x; 3) back in late 2014, stock was volatile when F3Q15 billings missed due to FX but stock closed up 20% in 3 mos after a strong F4Q15; 4) Q2 is seasonally slow; Q4 still looks set up for a strong finish; 5) We think bear argument of M&A hiding problems in core bus is unfounded, and timing is mere coincidence. Maintain Buy on this LT secular winner."

For an analyst ratings summary and ratings history on click here. For more ratings news on click here.

Shares of closed at $79.42 yesterday.

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