Citigroup Reiterates Buy Rating, $35 PT on Microsoft Corporation on Continued Transition to Cloud

In a report published Friday, Citigroup analyst Walter H. Pritchard reiterated a Buy rating and $35.00 price target on Microsoft Corporation MSFT. In the report, Citigroup noted, “CFO Amy Hood gave a qualitative sense of impact of transition to cloud, but one that is evolutionary and already well underway (significant annuity rev already). New segments will give more clear visibility into consumer vs commercial revenue and profit contribution, which should help isolate drivers of business. Perhaps the only assumption that differed from our thinking was FY14 CAPEX of $6.5B vs. our $4.8B (but directionally not surprising). We expect stock will see near-term lift as some investors expected FY14 EPS might emerge closer to $2.50 vs our $2.71. EPS numbers still likely have risk to downside on PCs and Nokia dilution will hit FY at close but these are well understood.” Microsoft Corporation closed on Thursday at $33.64.