Citi analyst Tyler Radke slashed the price target on Microsoft (NASDAQ:) to $355.00 per share from $386.00 to reflect weaker PC growth and the integration of Nuance.
Ahead of Microsoft’s FQ3 earnings report, Citi’s reseller survey yielded constructive signals on MSFT’s commercial business.
“Resellers expect NTM growth to accelerate by 5pts vs. LTM (also an increase vs. last Q). This is despite slight negative impact from the conflict in Ukraine experienced by 38% of resellers. We also highlight positive EA renewal growth expectations for 2022, as well as upsell momentum to higher-tier O365. This is being boosted by Teams collaboration, but also a significant uptick in Teams telephony/voice, which is consistent with our takeaways from Enterprise Connect. In terms of quota achievement, 77% expect to hit accelerator, which we view as solid (and in-line with most of our prior surveys), although it does represent a slight downtick from last Q,” Radke said in a client note.
Moreover, the data points toward continued strength in Azure with the takeaways “ perhaps the most positive we’ve seen in the ~6 Qs we’ve run the survey.”
Microsoft stock price closed at $280.52 yesterday.
By Senad Karaahmetovic