CRM Struggles After Rare Analyst Downgrade

Analysts were overwhelmingly optimistic, coming into today

Digital Content Manager
Nov 12, 2020 at 11:59 AM
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The shares of Salesforce.com, Inc (NYSE:CRM) are down 0.2% at $253.60 at last glance, struggling to gain traction following a downgrade from Morgan Stanley to "equal weight" from "overweight." The analyst said the cloud software concern will need to focus on EPS growth if it wants to drive shares materially higher, given the company's current scale and mergers and acquisitions growth strategy. 

However, most analysts following the stock are still quite optimistic. In fact, 23 of the 26 in coverage called CRM a "buy" or better coming into today. Plus, the 12-month consensus price target of $277.34 is a 9.8% premium to current levels. 

This sunny outlook isn't all that surprising, considering CRM's 55.3% year to date lead, helped along by a late-August bull gap that sent the stock into previously uncharted territory. While the equity is trading slightly lower than its Sept. 2 all-time high of $284.50, the $230 mark has provided a buffer for several of its post-bull gap pullbacks, while familiar support at the 80-day moving average could also help reign in some of the stock's downward trajectory. 

While calls are still outnumbering puts on an overall basis, the equity's 10-day put/call volume ratio of 0.77 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 86% of readings from the past 12 months. This indicates a much healthier-than-usual appetite for long puts of late. 

 

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