Oppenheimer Remains Bullish on Microsoft (MSFT) Following 2Q Results
Oppenheimer reiterated an Outperform rating and $62.00 price target on Microsoft (NASDAQ: MSFT) following the company's 2Q earnings report. Non-GAAP revenue was reported at $22.1B was up 1.6%, vs. Oppenheimer's $22.4B estimate. The company also reported EPS of $0.62, in-line with estimates. MSFT's cloud business continues to scale, with commercial cloud revenue at a $10B+ run rate.
Analyst Timothy Horan commented, "MSFT results were mixed with revenue 1% below our estimate (macro pressures and cloud transition), but on much lower expenses with EBIT a 5% beat on good cost controls. Overall, results point to MSFT's cloud business performing very well, as highlighted by a larger CAPX ramp. We are in the early stages of new cloud development platforms (Azure, Office 365, Skype, etc.). Also, with products such as SQL recently released for Azure and Azure Stack still in beta, we expect improvements in Intelligent Cloud growth going forward as well as Windows 10 monetization from enterprise adoption. Ultimately, our thesis that MSFT is the dominant hybrid cloud company was more than supported by results this quarter, and we would be buyers on any weakness."
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Shares of Microsoft closed at $55.78 yesterday.