Morgan Stanley Meets With CFO Of CRM

Morgan Stanley is maintaining its Overweight rating, along with its $200 price target on salesforce.com CRM following meetings with the company's CFO recently. Says Morgan Stanley, in the report, “We recently met w/ CRM CFO Graham Smith and have new data from the field on transactions and hiring. We expect cons. to move towards our ests. over the over the next several Qs and for billings to stabilize at +30-35 percent YoY growth as: a) large deal flow remains good post Q1 and CRM is becoming more strategic; b) sales hiring is re-accelerating, productivity improving and latent capacity should put upward pressure on 2H billings; c) emerging services like Jigsaw and Force.com are tracking well and d) margins should be flat to up from FY12. In addition, renewal margins are approaching 85% for customers more than 3 years old and we now think renewal rates could improve another 200-300 bps, which suggest CRM's installed base could be worth closer to $100-110/share vs. our prior calculation of $80-90. We remain buyer of the stock.” CRM closed at $140.28 yesterday.