5 Takeaways from Microsoft (MSFT) Preannouncement, JPMorgan Leaves PT Unchanged
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JPMorgan analyst Mark Murphy reiterated an Overweight rating and $200.00 price target on Microsoft (NASDAQ: MSFT) after the company announced that it does not expect to meet its More Personal Computing segment (32% of total revenue) guidance of $10.75B-$11.15B. The analyst offered 5 key takeaways from the preannouncement:
1) The preannouncement is a Supply Chain issue, not a demand issue.
2) MPC is MSFT's least strategic segment.
3) All other segments of March guidance is left unchanged.
4) EPS Sensitivity is likely high. For Microsoft to comment this early in the March quarter the impact is likely large. The analyst estimates that every $1B of adverse MPC impact would equate to 3-8c of EPS depending on the mix.
5) It is very difficult to assess the potential impact of COVID-19 on the software universe.
Shares of Microsoft closed at $166.00 yesterday.
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