SAN DIEGO, CALIF. (TheStreet) -- LinkedIn (LNKD) is on the receiving end of a performance review-based raise Monday as BMO Capital Markets upped its 12-month price target for the professional social network to $260 on new confidence in the company's ability to boost its subscriptions business.
The firm pointed to recent meetings with executives who addressed their concerns that a newly enhanced prospecting tool called "Sales Navigator," which helps salespeople better locate LinkedIn members who might be potential customers, can grow revenue without alienating the company's 332 million registered users. In LinkedIn's most recent quarter, the overall subscription business, which includes revenue from Sales Navigator, grew 43% year-over-year to $114 million, and represented 20% of revenue.
"We are raising our target to $260 from $250 on a higher target multiple based upon greater clarity on Sales Navigator's ramp," BMO analyst Daniel Salmon wrote in the firm's Monday note. Despite the vote of confidence, LinkedIn shares were trading down by around 3% at $219.32 on Monday afternoon.
In July, LinkedIn launched a new version of Sales Navigator as a means of selling more sophisticated lead generation software, which hinges around social data from the social network and clients' CRM tools, to large corporations such as SAP for company-wide installations. Sales Navigator is priced at between $60 and $100 per month, with the pricier version including a "TeamLink" feature for sharing prospecting data among large sales teams.