Brean Upgrades Salesforce To Buy, Foresees 'Deeper' Cloud Integration Coming

In a report published Tuesday, Brean Capital analyst Sarah Hindlian upgraded the rating on

from Hold to Buy, with a price target of $85. Salesforce.com is integrating its key cloud products in sales, service and marketing, while focusing on leveraging its core sales cloud client base with upsell opportunities. "We believe Salesforce.com can now offer better capture of the entire customer lifecycle: from marketing, to sales conversions, and subsequent support services. As customers increasingly adopt new clouds and modules of new clouds, we believe the opportunity to sell the entire cloud line-up improves," analyst Sarah Hindlian wrote. The company is poised for robust revenue growth as product improvements and deeper cross-cloud integration aid upsell buildings. The total revenues estimates for FY17 and FY18 have been raised from $7.89bn to $8.0bn and from $9.65bn to $9.75bn, respectively. "We believe the upsell opportunity on Marketing & Services Clouds is now better aligned with core Sales Cloud customer needs and will aid in growing New ACV in FY'17 and beyond," Hindlian added. An improvement in service and marketing attach rates is expected to enable the company to record higher subscription revenues going ahead, the report stated.