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) $ 83,018.24 0.99%
ethereum
Ethereum (ETH) $ 1,942.77 1.00%
tether
Tether (USDT) $ 1.00 0.02%
xrp
XRP (XRP) $ 2.29 1.30%
bnb
BNB (BNB) $ 622.96 1.82%
solana
Solana (SOL) $ 125.77 0.70%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.706435 1.05%
dogecoin
Dogecoin (DOGE) $ 0.168828 1.36%
tron
TRON (TRX) $ 0.241783 9.51%
staked-ether
Lido Staked Ether (STETH) $ 1,940.33 0.94%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 82,888.21 0.85%
leo-token
LEO Token (LEO) $ 9.76 0.42%
chainlink
Chainlink (LINK) $ 13.99 0.04%
the-open-network
Toncoin (TON) $ 3.59 3.13%
usds
USDS (USDS) $ 1.00 0.07%
stellar
Stellar (XLM) $ 0.27633 2.27%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,327.06 1.06%
hedera-hashgraph
Hedera (HBAR) $ 0.18918 0.39%
pi-network
Pi Network (PI) $ 1.17 11.29%
avalanche-2
Avalanche (AVAX) $ 19.10 1.54%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 2.12%
sui
Sui (SUI) $ 2.31 2.42%
mantra-dao
MANTRA (OM) $ 7.00 0.65%
litecoin
Litecoin (LTC) $ 90.30 1.22%
polkadot
Polkadot (DOT) $ 4.48 3.07%
bitcoin-cash
Bitcoin Cash (BCH) $ 335.03 0.02%
bitget-token
Bitget Token (BGB) $ 4.64 4.57%
ethena-usde
Ethena USDe (USDE) $ 0.999542 0.04%
weth
WETH (WETH) $ 1,943.44 1.14%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 0.998664 0.30%
hyperliquid
Hyperliquid (HYPE) $ 14.43 10.12%
whitebit
WhiteBIT Coin (WBT) $ 28.16 1.15%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,066.53 1.13%
monero
Monero (XMR) $ 207.97 2.14%
uniswap
Uniswap (UNI) $ 6.45 3.04%
susds
sUSDS (SUSDS) $ 1.04 0.07%
aptos
Aptos (APT) $ 5.37 1.12%
okb
OKB (OKB) $ 53.29 1.22%
dai
Dai (DAI) $ 1.00 0.04%
near
NEAR Protocol (NEAR) $ 2.59 1.42%
pepe
Pepe (PEPE) $ 0.000007 1.76%
internet-computer
Internet Computer (ICP) $ 5.83 0.64%
mantle
Mantle (MNT) $ 0.810348 0.15%
gatechain-token
Gate (GT) $ 22.08 0.21%
ethereum-classic
Ethereum Classic (ETC) $ 17.93 1.13%
ondo-finance
Ondo (ONDO) $ 0.845633 1.05%
tokenize-xchange
Tokenize Xchange (TKX) $ 32.89 2.17%
aave
Aave (AAVE) $ 172.76 0.69%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 83,043.25 0.91%