Salesforce Gets Price Target Hike from Morgan Stanley

Morgan Stanley has raised its price target on Salesforce from $153 to $178, predicting that there will be a big jump in sales during the coming years from the company’s deal with MuleSoft that had closed in May.

According to Morgan Stanley analyst Keith Weiss, “Unlocking data trapped in legacy systems via MuleSoft brings SFDC [Salesforce.com] to the forefront of driving digital transformation for its customers.”

Weiss added, “Consensus expectations likely underestimate this growth potential and SFDC’s improved M&A track record, driving our estimates and price target higher.”

The firm believes there will be big success from the multi-billion dollar acquisition.

It had been back in March that Salesforce said it had agreed to acquire MuleSoft for about $6.5 billion. MuleSoft’s products enable companies to stitch together disparate software applications, data and devices.

Weiss has forecast that MuleSoft will add more than $1 billion in sales to the company by 2021 versus an estimated $449 million in sales this year.

“The acquisition of MuleSoft directly addresses the challenge of connecting and utilizing data trapped in legacy systems more efficiently into Salesforce.com’s platform, extending the overall value proposition into a broader hybrid (public and private) cloud environment required for most larger enterprises,” he explained.

Morgan Stanley has a “overweight” rating on the stock.

Disclaimer: We have no position in salesforce.com, inc. (NYSE: CRM) and have not been compensated for this article.