He has an overweight rating on the stock.
“With tough near-term comparisons already in consensus estimates, and the multiple having pulled back to 26 times [estimated] 2022 calendar year EPS, we see potential for outperformance in fiscal year 2021 [ending June 30],” Weiss wrote in a commentary. “The durability of growth and margin expansion are underappreciated.”
Microsoft shares traded at $218.60, down 0.37%. They have climbed 39% year to date through Thursday, trailing the 42% ascent of the Nasdaq.
“With shares stuck in a narrow trading range since July, the question we hear most often from investors is: ‘What is it going to take for MSFT to work again?’" Weiss said.
“A combination of market factors (sector rotation out of software) and Microsoft-specific factors have been weighing on the stock, in our view. The sector rotation out of software likely has more room to run, but resolution in the fundamental factors should help to offset those pressures and restart momentum in the shares,” the analyst added.
Meanwhile, the cyber-attack allegedly perpetrated by Russia against the U.S. government and corporations counted Microsoft as one of its victims, Reuters reported on Thursday. Weiss didn’t mention the attack in his commentary.