Oppenheimer Maintains Bullish View on Microsoft (MSFT) Post Q2

Oppenheimer analyst Shaul Eyal reiterated an Outperform rating and $56 price target on Microsoft (NASDAQ: MSFT) following solid quarterly results.

Eyal commented, "MSFT's ongoing transition under CEO Nadella continues to make headway into new territories. 2QFY16 results recorded healthy revenue and op. margin performance despite continued FX headwinds."

"While in line with the S&P 500's YTD performance (-7.7%) MSFT can remain a solid investment vehicle if it continues to show: 1. strong Cloud Services performance (up 140% constant currency YoY); 2. continued operational discipline supporting margin improvement; 3. strong commercial presence via Dynamics and Office 365; 4) clear product road-map supporting further acceleration. MSFT continues to position itself as one of two cloud infrastructure related market leaders."

For F3Q16 they are tweaking our revenue estimate to $21.9B from $22.6B and EPS to $0.61 from $0.70. For FY16, revenue is tweaked downward to $93.5B from $93.6B and EPS remains intact at $2.77. For FY17 revenue/EPS estimate is intact at $101B/$3.12.

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 $52.06 yesterday.

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