Customer relationship management system provider Salesforce (CRM) is entering the earnings confessional after the close on Tuesday, Dec. 3. The shares are brushing off a price-target hike from Citigroup to $368 from $290 ahead of the event, last seen down 3.5% to trade at $331.32.
Support from the 20-day moving average has helped capture multiple pullbacks over the past few months, though the equity is eyeing its second day of losses this week. Longer term, Salesforce stock sports a 25.7% year-to-date gain.
CRM has a mixed history of post-earnings performance. Over the past two years, shares ended four next day sessions lower, including a 19.7% drop in May. The equity averaged a move of 7.5%, regardless of direction, but this time around options traders are pricing in a slightly higher 7.8% post-earnings swing.
Today’s correction may have been overdue, with CRM’s 14-day Relative Strength Index (RSI) reading at an “oversold” 73.48. Even further, the brokerage bunch is heavily bullish, with 34 of 44 carrying a “buy” or better, leaving ample room for downgrades should this optimism begin to unwind.
It’s worth noting that the stock’s Schaeffer’s Volatility Scorecard (SVS) of 92 out of 100 implies a tendency to outperform volatility expectations — a boon for premium buyers.