Microsoft (MSFT) - Get Report continues to impress Wall Street, with the software behemoth beating earnings estimates for the ninth straight quarter Thursday afternoon. Several analysts raised their price targets on Microsoft once again.
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Shares of the software giant were trading 1.98% higher to $139.12 in early trading on Friday, close to an all-time high.
Microsoft said it earned an adjusted $1.37 a share in its second quarter, beating analysts estimates of $1.21. Revenue was $33.72 billion, better than the expected $32.77 billion, as commercial cloud growth of 39% year-over-year played a key role in the overall revenue beat.
The average analyst price target moved to $153 a share from $148 Thursday, according to Bloomberg. Here's what analysts said:
WedBush Securities, Outperform, Price Target Raised to $160 From $155
"Total revenues came in at $33.7 billion vs. the Street at $32.8 billion with this billion dollar beat speaking to the underlying strength that Redmond is seeing in the field as more enterprises move to the cloud with Nadella & Co," WedBush's Dan Ives wrote in a note. "This quarter was an absolute 'blow-out quarter' across the board with no blemishes and in our opinion speaks to an inflection point in deal flow as more enterprises pick Redmond for the cloud and thus further narrow the competitive gap vs. Bezos and AWS."
Ives now expects 2020 EPS to come in at $5.15, up from an initial forecast of $5.08.
Godman Sachs, Buy, Price Target Raised to $151 From $144
"We see gross profit growth of ~11% in FY20 and ~10% in FY21, benefiting from continued improvement in commercial cloud gross margins," Goldman's Heather Bellini wrote in a note. "Furthermore, when coupled with disciplined expense controls, we see sustainable operating margin expansion as we look ahead, with our forecast of ~50bps of improvement in FY20 and ~40bps in FY21." She sees double digit EPS growth for the next few years.
Morgan Stanley, Overweight, Price Target Raised to $155 From $145
"Strong secular positioning of MSFT's commercial business drove out-performance across all revenue segments," analyst Keith Weiss wrote. "Providing core enterprise systems, that drives a highly recurring revenue base and durable EPS growth -- we see a solid case for MSFT to be valued as a new staple and take our PT to $155."
"Our calendar year 2020 EPS moves higher to $5.69 from $5.61 prior."
Stifel, Buy, Price Target $155
"Intelligent Cloud beats consensus estimates," analyst Erik Rasmussen wrote. "Management guided to Intelligent Cloud revenues of $10.3B-$10.5B for F1Q20, above consensus estimates of $10.11B." He added, "Commercial cloud growth reflects increasing size of deals."