Microsoft may be facing some near-term pressures, but most analysts think the stock remains a buy at current levels. The tech giant reported a better-than-expected quarterly profit Tuesday, earning $2.32 per share . Analysts on average expected earnings per share of $2.29, according to Refinitiv. Revenue came in at $52.75 billion, slightly below an estimate of $52.94 billion. However, Microsoft shares fell more than 2% in Wednesday premarket trading after the software giant issued a lackluster revenue forecast for the current quarter. Finance chief Amy Hood told analysts during a conference call Tuesday that, “In our commercial business we expect business trends that we saw at the end of December to continue into Q3.” The company’s Microsoft 365 subscriptions grew at a slower-than-expected pace. Growth was also slower than forecast for Microsoft’s for identity and security services and business-oriented Windows products . MSFT 1D mountain MSFT under pressure Still, most analysts covering Microsoft are standing by the stock. Citi analyst Tyler Radke said Microsoft remains “best positioned” among the large cap software names, saying that it offers investors a good mix of growth and profitability. Radke has a buy rating on the stock, and raised his target price slightly to $282 from $280. Notably, the analyst said that “guidance looks more conservative to us, particularly across Azure, Windows OEM, and opex, likely in an attempt to derisk FY23,” Radke wrote Wednesday. “Though difficult to call it the last cut (pending macro factors/recession risk), even on lower numbers, MSFT’s consolidated revenue and EPS growth is beginning to accelerate from these levels, which we think can be a differentiator.” Morgan Stanley’s Keith Weiss maintained an overweight rating on the stock, and a $307 price target, saying the company’s near-term troubles have created an “attractive entry point into one of the best secular growth stories in tech.” Specifically, the analyst expects the firm’s AI developments is raising the market opportunity for Azure. “Easing compares, price increases, waning FX headwinds and decelerating opex all work to accelerate EPS growth to double digits by Q4, which should bring investors back to MSFT,” Weiss added. Bank of America’s Brad Sills, meanwhile, reiterated a buy rating on the stock, saying there’s no change to his long-term bullish view on Microsoft. The analyst pointed to sustained demand across Microsoft’s portfolio despite the current…
Click Here to Read the Full Original Article at Investing…
