5 Takeaways from Microsoft (MSFT) Preannouncement, JPMorgan Leaves PT Unchanged

February 27, 2020 6:31 AM EST
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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.

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 $166.00 yesterday.

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