Stock Market News

Microsoft Still a Top Pick at BofA as Windows Softness Offset by Azure Strength

2022.07.18 18:45

Microsoft Still a Top Pick at BofA as Windows Softness Offset by Azure Strength
Microsoft (MSFT) Still a Top Pick at BofA as Windows Softness Offset By Azure Strength – BofA

By Sam Boughedda

In a note to clients Monday, BofA analyst Brad Sills said he expects Microsoft’s (NASDAQ:MSFT) “PC/Windows softness to largely offset CC Azure & Office strength” when the company reports fiscal fourth-quarter financial results after the close on Tuesday, July 26.

BofA expects Microsoft revenue to be “largely in line” with their “$52.3bn (+13% y/y, +16% cc)” estimate, with expected Azure and O365 upside offset by PC/Windows weakness.

“Partner commentary suggests solid sustained workload migration to the Azure cloud platform from pull-through across Power Apps, Dynamics, Server Annuity/hybrid and Office 365. We noted incremental strength from security/active directory,” said Sills. “We look for cc Azure growth of 48%, versus our base estimate for 46%. We estimate a -3% to -4% point FX impact, translating to 44% – 45% reported Azure growth, exceeding our updated 43% estimate in early June. This implies $100mn to $200 mn upside to our $21.05bn IC (+21% y/y, +24% cc) estimate.”

The analyst added that the firm is comfortable with its “O365 subscriber growth estimate of 14%, decelerating 2% points from 16% in Q3 on a 2% point tougher compare (17% in Q4FY21 vs 15% in Q3FY21).”

“We believe expectations for a muted Q4 are largely priced into the shares, with the stock trading at 22x C23E FCF,” added Sills, who maintained a Buy and top pick rating on the stock with a $345 per share price target.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 83,201.29 1.07%
ethereum
Ethereum (ETH) $ 1,935.88 2.16%
tether
Tether (USDT) $ 1.00 0.00%
xrp
XRP (XRP) $ 2.29 1.36%
bnb
BNB (BNB) $ 617.12 2.33%
solana
Solana (SOL) $ 126.14 1.87%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.708807 1.25%
dogecoin
Dogecoin (DOGE) $ 0.168076 1.23%
tron
TRON (TRX) $ 0.232688 4.57%
staked-ether
Lido Staked Ether (STETH) $ 1,934.55 2.18%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 83,077.26 1.05%
leo-token
LEO Token (LEO) $ 9.76 0.01%
chainlink
Chainlink (LINK) $ 13.91 0.07%
the-open-network
Toncoin (TON) $ 3.61 5.24%
stellar
Stellar (XLM) $ 0.27926 5.09%
usds
USDS (USDS) $ 1.00 0.01%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,306.91 1.88%
avalanche-2
Avalanche (AVAX) $ 19.13 3.04%
hedera-hashgraph
Hedera (HBAR) $ 0.187501 1.13%
pi-network
Pi Network (PI) $ 1.16 1.80%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 0.06%
sui
Sui (SUI) $ 2.31 0.97%
mantra-dao
MANTRA (OM) $ 6.92 0.51%
polkadot
Polkadot (DOT) $ 4.52 6.50%
litecoin
Litecoin (LTC) $ 90.03 1.03%
bitcoin-cash
Bitcoin Cash (BCH) $ 332.74 0.91%
bitget-token
Bitget Token (BGB) $ 4.68 5.70%
ethena-usde
Ethena USDe (USDE) $ 0.999972 0.05%
weth
WETH (WETH) $ 1,936.36 2.20%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.08%
hyperliquid
Hyperliquid (HYPE) $ 14.20 9.75%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,057.58 2.20%
whitebit
WhiteBIT Coin (WBT) $ 28.14 0.38%
monero
Monero (XMR) $ 208.01 1.58%
uniswap
Uniswap (UNI) $ 6.36 2.35%
susds
sUSDS (SUSDS) $ 1.04 0.05%
aptos
Aptos (APT) $ 5.47 4.38%
dai
Dai (DAI) $ 1.00 0.03%
okb
OKB (OKB) $ 52.34 1.47%
near
NEAR Protocol (NEAR) $ 2.59 2.24%
pepe
Pepe (PEPE) $ 0.000007 3.05%
internet-computer
Internet Computer (ICP) $ 5.83 0.93%
gatechain-token
Gate (GT) $ 22.17 1.49%
ethereum-classic
Ethereum Classic (ETC) $ 17.92 2.77%
mantle
Mantle (MNT) $ 0.800656 2.91%
ondo-finance
Ondo (ONDO) $ 0.83955 1.57%
aave
Aave (AAVE) $ 170.79 0.01%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 83,220.30 1.16%
tokenize-xchange
Tokenize Xchange (TKX) $ 32.57 0.77%