Microsoft software leader received a bullish report from Morgan Stanley, which believes the company will see sustained double digit earnings per share growth. (Microsoft)
Microsoft software leader Microsoft (MSFT) received a bullish report Monday from Morgan Stanley, which believes the company will see sustained double-digit growth in earnings per share.
Morgan Stanley analyst Keith Weiss reiterated his overweight in Microsoft stock and raised his price target to 80 from 72.
Microsoft shares closed 1.2% to 70.87 on today's stock market. It reached a record high of 72.89 on June 5.
"Microsoft is once again showing double-digit EPS growth - and investors should be willing to pay a larger multiple for that growth," Weiss said in a note to customers. "Through the first half of fiscal year 2017, the digested action impacts the acquisition of LinkedIn, a higher tax rate and modest foreign exchange, and is now positioned to continue positive EPS reviews."
Microsoft cloud computing companies are the main drivers of the company, Weiss said. They include Office 365 productivity software, Azure cloud infrastructure services, and Dynamics business software.
In a report released Thursday, Pacific Crest Securities predicted that Microsoft would overtake Amazon (AMZN) Amazon Web Services to become the leader in revenue-based public cloud services in 2017. It anticipates Microsoft to have an annual revenue rate Of $ 15 billion for public cloud services by the end of the year.
"Microsoft seems to be better positioned to get the most benefit when public cloud spending triples in 2021," Pacific Crest analyst Brent Bracelin said in a report. He estimates that public cloud spending will reach $ 239 billion by 2021.
Bracelin reiterated its overweight in Microsoft shares with a target price of 78.
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