Salesforce Remains A Top Pick At Macquarie Ahead Of Earnings

Salesforce.com, Inc. CRM remains a Top Pick at Macquarie ahead of the company's second quarter earnings on August 31. Wall Street consensus calls for earnings of $0.22 a share on revenue of $2.02 billion. The company had met or beat consensus revenue and EPS estimates in each quarter for at least the past seven years.

"While we appreciate investors are anxious around the recent bidding activity on LinkedIn, our checks suggested at least an in-line quarter on a constant currency basis, with the commercial segment just in-line, but enterprise adoption continuing to outperform," analyst Sarah Hindlian wrote in a note.

However, the analyst cut her second quarter billings estimate by about $62 million to about $1.801 billion and revenue estimate by about $11 million to $1.999 billion to reflect forex woes due to Brexit vote.

The analyst also trimmed her FY'17 billings view by about $82 million to $9.331 billion and slashed revenue estimate by about $60 million to $8.236 billion.

That said, Hindlian noted shares remain "extremely attractive" as the Lightning product cycle is just beginning, and she expects significant momentum coming out of Dreamforce event in early October.

The analyst also highlighted six key topics investors should look in the print and the conference call:

• 1) "M&A Strategy"
• 2) Salesforce Einstein & aggressive entrance into artificial intelligence market"
• 3) "Commercial Cloud developments as Demandware is integrated"
• 4) "Strategies around recently acquired Quip and BeyondCore"
• 5) "U.S. Federal Gov't purchasing as the co. has recently signed large blanket purchasing agreements with the U.S. Federal Government"
• 6) "IoT Cloud developments."

Hindlian reiterated her Outperform rating and $97 target price, a potential upside of 21 percent over Monday's close.