FBR Capital On Salesforce.com Takeover
TipRanks | Apr 30, 2015 09:34AM ET
By Sarah Roden
Rumors are flying about a potential Salesforce.com Inc (NYSE:CRM) takeover, but who is the most viable suitor? Oracle (NYSE:ORCL), Hewlett-Packard Company (NYSE:HPQ), IBM (NYSE:IBM), and Microsoft (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 (NYSE:CRM) s 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.
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% success rate recommending the stock with a +2.6% average return per ORCL rating. Overall, Ives has a 71% success rate recommending stocks with a +10.4% average return per rating.
On average, the top analyst consensus for Oracle on 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% success rate recommending the stock with a +42% average return per CRM rating. Overall, Roderick has a 58% success rate recommending stocks with a +7.9% average return per recommendation.
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On average, the top analyst consensus for Salesforce on TipRanks is Moderate Buy.
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