UPDATE: Credit Suisse Reiterates on Microsoft Following FQ3 Revenue Report

In a report published Friday, Credit Suisse analyst Philip Winslow reiterated an Outperform rating on

, and raised the price target from $42.50 to $47.50. In the report, Credit Suisse noted, “We believe the key takeaway this quarter was the growing momentum in Office 365—with Office 365's revenue run-rate reaching $2.5 billion (vs. $1.5 billion at year-end FY2013 and $1.0 billion in the year-ago quarter). Office 365 Home users increased to 4.4 million (vs. 3.5 million in FQ2, 2.0 million in FQ1, and 1.0 million on May 29, 2013). "We view this robust adoption of Office 365 as a major positive (especially considering that FQ3's results only benefited from 5 selling days of Office 365 for the iPad), given that we firmly believe the lifetime revenue and operating profit of Office 365 is meaningfully higher than the traditional license model. Specifically, transitioning Microsoft's consumer user base to Office 365 could add at least $9 billion in incremental revenue annually with virtually no incremental cost—translating into more than $0.90 in additional EPS.” Microsoft closed on Friday at $39.86.