Market Overview

Microsoft's Street Views Descending After Q3 Results

Share:
Microsoft's Street Views Descending After Q3 Results
Related MSFT
Inside The Hidden Economy Of Pawn Shops
IBM Kicks Off The Big Tech Earnings Season
First American Bank Buys JPMorgan Chase & Co, Bank of America Corporation, Devon Energy ... (GuruFocus)

A strong dollar and a weak market for personal computers may result in lower expectations for Microsoft Corporation (NASDAQ: MSFT) following its fiscal third-quarter earnings report after the bell Wednesday.

"Consensus estimates clearly need to come down," according to Wells Fargo's Jason Maynard, who cut his fiscal 2016 forecast, but upgraded the company to Outperform, citing its 7 percent stock price decline since January 1.

The Microsoft Situation

Microsoft, trading recently at $43.26, up $0.28 cents, is expected to post a 25 percent decline in third-quarter earnings to $0.51 cents, while revenue will grow about 2 percent to $21.06 billion.

Global PC sales fell between 5.2 percent and 6.7 percent during the first three months of 2015, according to recent estimates by Gartner Inc (NYSE: IT) and IDC.

Maynard "isn't expecting much" from the pending launch of Microsoft's latest Windows 10 operating system and doesn't expect it will move the stock.

Related Link: Microsoft Earnings: What Morgan Stanley Is Watching

Risks On The Horizon?

But Bank of America's Kash Rangan sees risk in the upcoming event.

"It's a big question," Rangan poses, asking how many consumers will choose a free upgrade versus a new computer. Rangan maintains an Underperform rating on Microsoft.

Deutsche Bank's Karl Keirstead and Morgan Stanley's Keith Weiss both maintained Hold ratings on Microsoft, citing weak PC sales an uncertainty surrounding billings growth related to its cloud services.

Contrastingly, CLSA's Ed Maguire reiterated an Outperform rating and said that, beyond foreign exchange worries and the PC market, Microsoft is "well-positioned" to providing business services related to the cloud.

 
Image Credit: Public Domain

Latest Ratings for MSFT

DateFirmActionFromTo
Jan 2017Wells FargoInitiates Coverage OnOutperform
Dec 2016PiperJaffrayInitiates Coverage OnOverweight
Nov 2016Goldman SachsUpgradesNeutralBuy

View More Analyst Ratings for MSFT
View the Latest Analyst Ratings

Posted-In: Bank of America CLSAAnalyst Color Upgrades Price Target Previews Reiteration Analyst Ratings

 

Related Articles (MSFT + IT)

View Comments and Join the Discussion!