Financial Advisors Look At Salesforce.com, Inc. (CRM) Following Strong Earnings, Mixed Outlook

The US stock market ended last week in the green despite starting on a rather pessimistic note due to trade concerns and weak manufacturing data. In the second half of the week, trade concerns were alleviated and the strong jobs report helped boost sentiment.

On Monday, President Trump announced a new round of tariffs, this time on steel and aluminum imports from Brazil and Argentina. Later on the same day, Commerce Secretary Wilbur Ross said that if a deal with China is not reached by mid-December, the White House will boost tariffs on Chinese imports as well. Moreover, on Tuesday, the mood worsened as Trump suggested that a deal could wait after the 2020 elections and the Trump administration threatened to slap additional tariffs on France on the back of the French new digital services tax, that the White House sees as harmful to US tech companies. France said the EU would retaliate if President Trump follows through on his plan and the UK added fuel to the fire by suggesting a similar digital sales tax. Nevertheless, by Wednesday, reports suggested that the deal with China was still on track.


Economic data also swung investors’ sentiment last week. The ISM Manufacturing Index for November showed a reading of 48.1, versus a consensus estimate of 49.4 and new orders fell to 47.2 from 49.1. On the other hand, the nonfarm payroll data showed the US economy adding 266,000 jobs in November, much higher than the expected 186,000 and the previous month’s figure of 156,000. The unemployment rate also slipped to 3.5% from 3.6% and was better than estimates of 3.6%.


Amid this news, the S&P 500 advanced by 1.08% last week, followed by the NASDAQ Composite with a 1.03% gain. The Dow Jones Industrial Average inched up by 0.84%.


TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, looked at the tickers that were most searched by Financial Advisors last week to identify individual companies that were in the spotlight. On the first spot was Apple Inc. (NASDAQ: AAPL). The iPhone maker saw its price target boosted to $300 from $250 by Citi analyst Jim Suva. The analyst maintained the ‘Buy’ rating and raised earnings estimates suggesting strong holiday sales. Apple was followed by Amazon.com, Inc. (NASDAQ: AMZN), which on Tuesday unveiled its new AWS cloud processor chip, the Graviton2. The chip offers better performance at a lower cost compared to alternatives from Intel Corporation (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: AMD).


Roku Inc (NASDAQ: ROKU) also made the list of the most-searched tickers after Morgan Stanley downgraded the stock to ‘Underweight’ from ‘Equal Weight’ but raised the price target to $110 from $100, citing a slow-down in revenue and gross profit growth next year. The downgrade sent the stock 7% lower in pre-market trading on Monday, but didn’t affect much its year-to-date performance, which currently stands at around 390%. in fourth place on TrackStar’s list of most-searched tickers is Eversource Energy (NYSE: ES), followed by Salesforce.com, inc. (NYSE: CRM).


Salesforce.com, inc. (NYSE: CRM) stock lost 1.86% last week and is currently 16% in the green year-to-date. The company was in the spotlight last week after reporting its financial results for the third quarter. Its non-GAAP EPS of $0.75 was better than the expected $0.66 and the GAAP net loss of $0.12 per share topped the estimates by $0.09. Revenue of $4.51 billion advanced by 33% on the year and was $60 million better than expectations. However, investors were disappointed by the company’s downside fourth-quarter EPS outlook. Salesforce expects EPS between $0.54 and $0.55, which is lower than the consensus estimate of $0.61, although revenue outlook between $4.74 billion and $4.75 billion is better than the expected $4.73 billion.


On the back of the report, a slew of analysts updated their ratings and/or price targets on Salesforce.com’s stock. Among them, Credit Suisse reiterated its ‘Outperform’ rating and raised the price target to $185 from $175, Morgan Stanley increased the target to $197 from $180 with ‘Overweight’ rating, and Citigroup increased the price target to $196 from $185 with a ‘Buy’ rating.

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