Microsoft (MSFT): Still Grossly Overvalued - Jefferies
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Jefferies analyst, John DiFucci, reiterated his Underperform rating on Microsoft (NASDAQ: MSFT) but raised his price target to $43 from $40 after non-GAAP EPS of $0.76 on rev of $22.3B topped consensus estimates of $0.68 and $21.7B.
The analyst estimates $0.03 of benefit from lower income taxes relative to guidance and another $0.01 from higher-than-expected “other income”; excluding these adjustments, EPS was about $0.04 better.
Gross margin of 64.9% was just shy of 65% guidance but 70 basis points above the Street, while non-GAAP operating margin of 31.8% was ahead of the Street’s 31.1%, which was the high end of guidance.
Dec Q rev guidance was below consensus though. Both the Intelligent Cloud and More Personal Computing segments came in below, while the current Street estimate for Productivity and Business Processes was at the guidance midpoint.
Shares of Microsoft closed at $57.25 yesterday.
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