What's Coming For Salesforce? Jefferies Answers

In a report published Tuesday, Jefferies analysts maintained their Underperform rating on salesforce.com, inc. CRM. The price target was set to $49. The analysts expect the company's commercial business to post in-line results for F1Q, with the enterprise business posting robust results. The analysts believe that the Street forecasts for total billings growth for Salesforce could be too aggressive, given the company's results for 2014. On the other hand, although 1Q tends to be the seasonally weakest quarter, Salesforce's enterprise business is likely to have beaten the relatively modest forecasts for the quarter. "However, we remain somewhat cautious regarding the company's efforts to further penetrate the enterprise with large deals on a consistent basis. In addition, recent M&A speculation could possibly hamper efforts to closing large strategic deals," the analysts said. Jefferies' survey of Salesforce's partners revealed that while the partners witnessed business that exceeded targets, it was slightly lower than the levels seen in the last quarter. The analysts believe that the partner survey indicates "healthy mid-market transaction flow." In addition, the Jefferies report said, "Several partners commented on some uncertainty created by the recent M&A speculation, which could impact their business."