Microsoft Reiterated Outperform by Oppenheimer Following Azure Talk
2022.06.08 20:37
Microsoft (MSFT) Reiterated Outperform By Oppenheimer Following Azure Talk
By Sam Boughedda
Oppenheimer analyst Timothy Horan reiterated an Outperform rating and $340 price target on Microsoft (NASDAQ:MSFT) Wednesday, following a “fireside chat” with Microsoft’s CFO of Cloud + AI, Seth Eisner, and Director of Cloud Revenue, Kristin Chester.
The analyst said Eisner and Chester asserted the Cloud as “vitally important” to Microsoft, and their tone was cautiously optimistic as they noted that despite the uncertain macro outlook, “under the central tendency, Microsoft is very well positioned” structurally.
Meanwhile, much of their discussion revolved around Azure’s goal to facilitate the digital transformation of Microsoft’s traditional enterprise customers
“Microsoft’s existing relationships and strong hybrid story position it favorably vs. other hyperscalers,” stated Horan.
He added that management was optimistic on future growth and did not suggest any slowing demand. However, “Microsoft believes in any economic slowdown, ‘customers want to enable core scenarios, take a broad portfolio of services, interconnected and easy to use,’ which plays well in strengthening the company’s position in growth adjacencies.”
“We reiterate our Outperform rating on MSFT (16.5x FY23E FV/EBITDA, 25x P/E multiple, in line with to moderately below five-year median) due to its dominant platform strategy leveraging innovation, network effects, and distribution, enabling robust pricing power,” the analyst concluded.
