Friday, August 03, 2007 (NYSE:CRM): First Albany reits Buy, ups tgt

- First Albany reiterates their Buy rating on (NYSE:CRM) and raises their price target to $58 from $53 ahead of 2Q results. FA notes their price target increase reflects greater confidence in CRM's attainability of subscriber forecasts.

They believe CRM's business trends improved materially subsequent to a soft start, perhaps favorably impacted by a mid-quarter sales push. Sources in CRM's ecosystem have generally indicated that the business performed "much better" in 2Q than it did in 1Q.

Currently the firm is unaware of any particularly large enterprise transactions that closed during 2Q. However, contacts suggest several are actively engaged and in the pipeline for the second half of FY08, including the oft-speculated 30K+ seat transaction. Recent checks lead them to suspect that the current consensus of 778K subscribers should be achievable.

Sources also indicate the internal shakeup continues and that material personnel changes could ensue. Apart from potential personnel changes, they believe current Street concerns (about competition from Microsoft and subscriber trends) could fade if CRM meets consensus revenue and subscriber targets.

Notablecalls: A pretty high-conviction call from First Albany's Mark Murphy. Must say I would call this one s-t actionable if the stock had not bounced the way it has over the past 2 days. I'm not ruling out SOME upside in CRM following this call, though.

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