salesforce.com (CRM): Fears Misplaced - Wedbush
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Wedbush analyst, Steve Koenig, reiterated his Outperform rating on shares of salesforce.com (NYSE: CRM) noting that shares have been under pressure since the June news of its acquisition of Demandware and its unsuccessful bidding war with Microsoft for LinkedIn. The buyside appears concerned that Salesforce is trying to sustain its growth in the face of organic sales deceleration. However, the analyst thinks Salesforce’s motivations in both of the deals strategic and he is not seeing any evidence of a secular or cyclical slowdown in Salesforce’s business.
The analyst stated "We think the current entry point for CRM shares looks compelling, given our outlook for a solid 2Q, sustained 20%+ organic growth, attractive trading multiples (26x EV/FCF on CY17E), healthy FCF generation, a strong market position and consistent execution". No change to the price target of $98.
Shares of salesforce.com closed at $77.82 yesterday.
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