FBR Capital Remains Bullish on Microsoft (MSFT) Following Cloud Momentum and Windows 10 Uptake

FBR Capital maintained an Outperform rating and $53.00 price target on Microsoft (NASDAQ: MSFT) following cloud momentum and a healthy Windows 10 uptake. Analyst Daniel Ives believes that these catalysts are setting the stage for a transformational cloud transition for Satya Nadella and company over the next few years.

Analyst Daniel Ives commented, "While market volatility and worries about China/overall growth have been overhangs for Microsoft and its tech brethren over the past month, we believe cloud momentum and a healthy Windows 10 uptake out of the gate is setting the stage for a transformational cloud transition for Satya Nadella and company over the next few years. With Windows 10 on pace to be installed on more than 100 million devices worldwide by the end of September based on our estimates, we believe the downloadable, free strategy and enhanced features around this nextgeneration platform are resonating with developers, consumers, and enterprises. With a more mobile workforce/consumer transitioning away from the PC, we think there are massive headwinds in Microsoft's bread-and-butter PC business, making it crucial that the Windows 10 cloud approach opens up new growth avenues for the Windows business to help offset some of the license decline, a strategy bearing early signs of success in the field. Our recent checks also indicate that Microsoft is experiencing strong adoption for its core cloud products (e.g., Office 365/Azure), a positive sign heading into FY16. We maintain our Outperform rating and $53 price target (a 15x multiple on an FY16E EV/FCF basis)."

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $43.36 yesterday.

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