Bank of America Merrill Lynch Reiterates Buy On Salesforce.com

Bank of America Merrill Lynch is out with a research report on Salesforce.com, Inc CRM and is reiterating its Buy rating and $160 price target on shares. In a note to clients, Bank of America Merrill Lynch writes, "Despite investors' macro concerns, our industry checks point to strong business conditions driven by green field and legacy replacements in Custom Cloud and Sales Cloud alongside traction in Service Cloud. We believe CRM has ramped up its sales/mktg hiring significantly to support growth. Key metrics are def revs, billings and CFO. Our def rev est. of $915mn (flat q/q, +34% y/y) and billings of $528mn (+28% y/y) have upside. Billings have accelerated in the last nine Qs with FQ1:12 exiting +44% (pg 4). Consensus is at +28-30% but billings growth of low to mid 30% is possible driven by 1) new billings better vs. our est of -5% q/q (pg 3), 2) lower attrition, 3) Radian6 est billings of $5-10mn, and 4) modest currency tailwind of $1-2mn. Our CFO est is $101mn." Shares of CRM gained $3.29 yesterday to close at $137.37.