Microsoft shares have been doing rather well recently, although their performance so far is only a beginning of what the company is about to see, according to a Nomura analyst, Christopher Eberle.
Berle appears to be extremely bullish on Microsoft, which his recent price target for the company’s stock being the highest on Wall Streat. The new prediction came right before the company’s quarterly financial results.
Microsoft stock (MSFT) was up 37% in 2019 thus far, and through Friday’s close, it climbed by another 0.3% to $139.39. Only two days later, on Sunday, July 14th, Eberle boosted his price target by entire $30, increasing it to $161 in the process. According to FactSet, the average among other analysts is only at $146. Eberle then justified his move by saying that material upside to numbers is likely to be less in fiscal 2019 than in previous years.
However, he added that Microsoft’s management team is the best in class and that it will likely continue executing as it has thus far. As a result, it is likely that the company’s standing in enterprise software will place it right at the crux of driving customers’ digital transformation.
Of course, Wall Street being bullish on Microsoft is nothing new, although the feeling is not unanimous. While many feel positive about the upcoming quarterly results, there are also some who have concerns about the shares in the long term.
Microsoft’s prediction sits slightly below the consensus
Microsoft has not released its financial report as of yet, and the date of the report’s publishing is set to be Thursday, July 18th, after the market closes. The current consensus on Wall Street is that earnings are likely to come in at around $1.21 per share, which would put the total revenue at around $32.75 billion. This will be a sizeable increase from the last year’s situation, where the earnings came in at $1.13 a share, and the revenue was at $30.08 billion.
While Eberle expects that the quarter will be relatively ‘in line,’ another analyst from Stifel, Brad Reback, believes that the firm might even beat its estimates. Microsoft itself estimated that its profit is slightly below the Wall Street prediction, at $1.20 a share, and a total of $32.69 billion in revenue. Reback claims that the firm will continue to draw benefits from its strong positioning.
In combination with a favorable IT environment, expense discipline, and strong execution — the company should keep seeing a sizeable profit, as well as a free cash flow generation for many quarters to come.
As for Nomura, it is not only bullish on Microsoft, but also on another price-optimization software maker, PROS Holdings (PRO). Nomura boosted its price by $22, from $55 to $77. Meanwhile, the company’s shares went up by around 0.6%, which brought them up to $69.03. The situation is certainly improving for many of the companies in 2019, and all eyes are currently on Microsoft, with analysts impatiently awaiting the report.
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