Analyst: Salesforce Stock Could See More Disruption

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Cowen downgraded Salesforce stock to “market perform”

Cowen downgraded, Inc. (NYSE:CRM) to “market perform” from “outperform” this morning, pressuring the shares 1% lower to trade at $144.88 before the bell.

The Wall Street broker also cut its price target on the cloud computing concern to $160 from $175, citing slowing growth for front-office vendors after saying it sees “elevated levels of disruption risk” if consumer spending is dented by a volatile macro backdrop.

Evercore ISI yesterday cut its price target on Salesforce stock to $175 from $200. A further unwinding of optimism could pressure CRM lower, especially considering the 12-month average target price of $190.96 is a 30.4% premium to last night’s close and 23 of 34 covering analysts still rate the shares a “buy” or better. 

On the charts, CRM is trying to recover from a mid-December dip to nearly three year lows. Pressure from its 100-day moving average has weighed for the past six months, a time during which CRM shed more than 20%. A look further back shows Salesforce stock sports a 35.3% year-over-year deficit.

For those wishing to speculate with options, now looks like the time to do so. Salesforce stock’s Schaeffer’s Volatility Index (SVI) of 35% sits in the relatively low 15th percentile of annual readings, suggesting options traders are pricing in low volatility expectations.