Shares of Salesforce (CRM) - Get Report, Amgen (AMGN) - Get Report and Honeywell (HON) - Get Report were trading mixed Monday, as they enter the Dow Jones Industrial Average, replacing Exxon Mobil (XOM) - Get Report, Pfizer (PFE) - Get Report and Raytheon Technologies (RTX) - Get Report.
The incoming stocks rose last week. Generally, incoming stocks trade higher rise as investors in the Dow index buy them.
Software provider Salesforce recently traded at $269.66, down 0.53%; environment control company Honeywell traded at $169, up 0.37%; and biotechnology company Amgen traded at $252.01, down 0.44%. Salesforce soared 31% last week.
The Dow has underperformed the S&P 500 by about 8 percentage points this year, according to Dow Jones. And that gap is likely to continue, as the S&P 500 has a greater emphasis on high-flying technology stocks, according to The Wall Street Journal.
Morningstar analyst Dan Romanoff is bullish on Salesforce.
“For its second quarter, Salesforce reported excellent results and materially raised its outlook for the year. This quarter represents an exclamation point after last quarter’s reasonable results and cautious guidance,” he wrote in a commentary last week.
“Based on strong results and guidance we are substantially raising our fair value estimate to $253 per share from $202 for wide-moat Salesforce. That said, like many software stocks, shares of Salesforce have run and we view them as approximately fairly valued.”
Still, “we believe Salesforce.com represents one of best long-term growth stories in software,” Romanoff said. “After introducing the software-as-a-service model to the world, Salesforce.com has assembled a front-office empire that it can build on for years to come.”