UPDATE: Credit Suisse Upgrades Salesforce.com to Outperform; Expansion Cycle Underway

David Johnson, Benzinga Staff Writer

May 03, 2012 7:07 AM

Tickers: CRM

Credit Suisse raises its rating on Salesforce.com (NYSE: CRM) from Neutral to Outperform and increases its price target from $145 to $185, as it believes an upgrade and expansion cycle is under way across multiple application segments.

Credit Suisse comments, "We believe that the convergence of multiple technologies, which are core to the fourth-generation architecture, is having more dramatic effects across both the B2B and B2C CRM markets than any other applications segment, as organizations feel increasingly compelled to modernize and expand CRM applications. Furthermore, switching from post-recession caution to a growth posture, CEOs are focused on retaining existing customers and attracting new customers, which is placing increased attention on outdated CRM applications. As such, we believe that the industry stands at the beginning of a multiyear e-commerce, marketing, sales, service, and call center replacement cycle."

CRM closed at $158.94 on Wednesday.

CRM: Short for next three weeks as we believe there will be some profit taking in the short term as market price outgrows fading takeover chatter that has sent it and similar stocks skyrocketing. We believe price should consolidate at the $135/share level, at which point the stock is close to its DCF-modeled price target. We'd then look to go long from there.

Tags: Credit Suisse

Posted in: Analyst Color, Upgrades, Price Target, Pre-Market Outlook, Analyst Ratings