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Investor Sentiment Remains Subdued Ahead Of Salesforce.com Earnings

Salesforce.com Inc NYSE:CRM - Investor Sentiment Remains Subdued Ahead Of Salesforce.com Earnings

Investors' sentiments remained subdued and volatile ahead of salesforce.com, inc. CRM 0.91%'s earnings announcement, which is scheduled for after the market close on Wednesday. The company has a history of delivering results either in line or above the consensus over the last seven years. There is no reason to suggest that the trend would be different in the second quarter.

This is also quite evident from different analysts' comments in the last few days. There is near unanimity that salesforce.com will most likely deliver in-line results for the second quarter. Similarly, analysts are not expecting any significant changes in the outlook to be offered by the company.

The Street has a consensus EPS estimate of $0.22 on revenue of $2.02 billion for the second quarter. Both Macquarie and D.A. Davidson expect the company to deliver in-line EPS.

Related Link: Salesforce Has Had "Meet Or Beat" Quarters For The Past 7 Years; Will The Streak Continue?

As far as revenue, Macquarie reduced its estimate by approximately $11 million to $1.999 billion to indicate foreign exchange impact, citing the Brexit vote. Similarly, D.A. Davidson also sees a weaker British currency hurting the top line. The company generated 17.1 percent of its revenue from Europe in the first quarter.

On the outlook, salesforce offered revenue forecast of $8.26–$8.32 billion for the fiscal year 2017 after its disclosure to acquire Demandware. D.A. Davidson analyst Jack Andrews counseled investors to not expect any upward revision, thus limiting the sentiments ahead of the results.

In the last two months, the following brokerages have provided analysis on the issue:

  • Morgan Stanley maintained at Overweight in July.
  • Citigroup maintained a Buy rating in July.
  • Macquarie reiterated its Outperform rating and $97 price target in August.
  • D.A. Davidson had a Neutral rating in August.
  • OTR Global downgraded from Positive to Mixed in August.

At time of writing, the stock traded down 0.74 percent at $79.21.

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DateFirmActionFromTo
Aug 2016OTR GlobalDowngradesPositiveMixed
Jul 2016Morgan StanleyMaintainsOverweight
Jul 2016CitigroupMaintainsBuy

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