Analysts Rush in With Bull Notes After CRM's Earnings Beat

Salesforce stock is inching lower, despite an earnings and revenue beat

Deputy Editor
Dec 4, 2019 at 10:19 AM
facebook twitter linkedin, Inc. (NYSE:CRM) took its turn in the earnings confessional this morning with some interesting results. CRM posted $4.51 billion in revenue, which shot up 33% since this time last year, and an earnings of 75 cents per share, both of which exceeded analysts' expectations. However, the firm slashed its fiscal fourth-quarter profit outlook, and in response, the stock is down 0.7%, to trade at $161.57.

This guidance cut didn't deter analysts however, with Morgan Stanley, BMO, and Credit Suisse all issuing price-target hikes (to $197, $190, and $185, respectively). The consensus 12-month target price of $190.40 is still at a solid 20% premium to current levels. Sentiment over CRM has already been overwhelmingly bullish, with all of the 24 in coverage calling it a "buy" or "strong buy." 

This optimism isn't unwarranted. The stock is up roughly 17% for the year, and has been trading just below its mid-November six-month peak of $166.33, with recent support at both its 200-day moving average. The shares have been bumping into the $164 region in recent weeks though, which has served as resistance on the charts for the better part of 2019.   

Unsurprisingly, on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) calls have almost doubled puts. CRM sports a 10-day call/put volume ratio of 1.92, which sits in the 69th annual percentile of its annual range. This means the appetite for these bullish bets has been slightly bigger than normal. 

Grab your FREE Eternal Contrarian report!


Special Offers from Schaeffer's Trading Partners