Drexel Hamilton Initiates a Buy on salesforce.com, inc. (CRM); Sees 43% Upside for the Stock


Brian White of research firm Drexel Hamilton has come out with a bullish call on shares of salesforce.com, inc. (NYSE:CRM). The analyst initiated coverage on CRM with a Buy rating and a price target of $100, which implies a potential upside of 43% from where the stock is currently trading.

When it comes to the CRM market, White commends Salesforce as “Zen Master of the Cloud,” a #1 SaaS vendor on a global scale with no end to expansion in sight, strengthened by a customer base that surpasses 150,000.

White asserts, “We believe the move into the cloud still remains in the early stages of development and opportunity for attractive growth over the next decade. In our view, Salesforce represents the best equity vehicle for investors to play the cloud trend and should be a core technology holding.” Additionally, White commends Salesforce’s cloud platform for its robust intelligence, particularly shining light on the company’s new Salesforce Einstein that now brings Artificial Intelligence (AI) to the table.

Moreover, the analyst sees substantial market opportunity, explaining, “In our view, the market opportunity in front of Salesforce is significant and has the potential to become even larger as the company‚Äôs portfolio expands. For example, Salesforce estimates its total addressable market (TAM) opportunity at $70 billion in 2016 and reaching $105 billion in 2020 for an 11% CAGR.”

Looking ahead, the analyst believes potential shines bright for the cloud computing giant. “With Salesforce down 11% in 2016 and significantly underperforming the up nearly 11% for the S&P 500 Index, we believe the stock can outperform the market in 2017,” White contends.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance According to TipRanks, five-star analyst Brian White is ranked #106 out of 4,288 analysts. White has a 59% success rate and garners 9.3% in his annual returns.

TipRanks analytics demonstrate CRM as a Strong Buy. Out of 35 analysts polled by TipRanks, 32 are bullish on salesforce.com stock, 2 remain sidelined, and 1 is bearish on the stock. With a return potential of 34%, the stock’s consensus target price stands at $93.65.