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FBR Capital: Oracle 'Most Realistic Buyer' Of Salesforce

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Rumors are flying about a potential salesforce.com, inc. (NYSE: CRM) takeover, but who is the most viable suitor? Oracle Corporation (NYSE: ORCL), Hewlett-Packard Company (NYSE: HPQ), International Business Machines Corp. (NYSE: IBM), and Microsoft Corporation (NASDAQ: MSFT) are all in the rumor mill.

On April 29, analyst Daniel Ives of FBR Capital stated that he believes an Oracle takeover of Salesforce.com is probable. The analyst reiterated an Outperform rating on Oracle with a $48 price target.

Earlier in the day, Bloomberg reported that Salesforce.com had been approached by an interested buyer. Salesforce is currently valued at about $0.75 per share with a total value of nearly $50 billion. Ives notes that this would make Salesforce one of Oracle’s largest acquisitions to date.

Related Link: Every Reason Oracle & Microsoft Would (Or Would Not) Acquire Salesforce

Ives lists several reasons that would make Oracle “the most realistic buyer” for Salesforce. First and foremast, Oracle is trying to establish itself in cloud technology, and “acquiring the leading cloud company and bringing on board a visionary leader in Marc Benioff” would be one step closer to this goal.

Second, Ives notes that Oracle needs to “make a transformative move” because they are facing pressure and competition in the SaaS industry. Ives continues that Salesforce and Oracle share a database, which would simplify the integration, and several Salesforce executives are Oracle alumni.

Ives concludes, “We view this more as Oracle trying to make a bold, decisive move to stake its claim in the cloud before it falls even farther behind…. We believe a ‘game changing’ acquisition of salesforce.com would fit right into Oracle’s wheelhouse as it could help accelerate the database stalwart’s painful cloud transition.”

Daniel Ives has rated Oracle 4 times since May 2014, earning a 75 percent success rate recommending the stock with a +2.6 percent average return per ORCL rating. Overall, Ives has a 71 percent success rate recommending stocks with a +10.4 percent average return per rating.

On average, the top analyst consensus for Oracle on TipRanks is Moderate Buy.

Separately, analyst Tom Roderick of Stifel Nicolaus rated Salesforce a Buy today and raised his price target from $79 to $83. Tom Roderick has rated Salesforce 12 times since February 2009, earning a 91 percent success rate recommending the stock with a +42 percent average return per CRM rating.

Overall, Roderick has a 58 percent success rate recommending stocks with a +7.9 percent average return per recommendation.

On average, the top analyst consensus for Salesforce on TipRanks is Moderate Buy.

Latest Ratings for CRM

DateFirmActionFromTo
Apr 2017BenchmarkInitiates Coverage OnOutperform
Apr 2017Credit SuisseInitiates Coverage OnOutperform
Feb 2017NeedhamInitiates Coverage OnHold

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: FBR Capital SalesforceAnalyst Color Analyst Ratings Tech

 

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