Wall Street Remains Polarized On Microsoft Following Strong Q3

Microsoft Corporation MSFT shares are surging 10.2 percent in Friday trading after the company reported Q3 top-line and bottom-line beats. The company reported EPS of $0.67 and revenue of $21.7 billion, ahead of consensus estimates of $0.58 and $20.7, respectively.

Where does Microsoft’s stock go from here? Here’s what four Wall Street firms had to say about tHe company’s earnings report.

Goldman Sachs
Analyst Heather Bellini conceded that the company had a “solid performance” in Q3, but it did not do enough to convince her to change her Sell rating on the stock. Goldman did, however, raised its price target from $40 to $45.

Jefferies
Analyst John DiFucci also went for the word “solid” to describe Q3, and noted the impressive growth in Azure as a positive for the company. Despite the positive numbers, Jefferies maintains its Underperform rating on Microsoft but raised its price target from $37 to $39.

Pacific Crest
Analyst Brenan Barnicle believes that Microsoft’s EPS has bottomed and is now returning to growth. He points out that both personal computing and intelligent cloud segments exceeded expectations in Q3. Pacific Crest maintains its Overweight rating on Microsoft and its $55 price target for the stock.

Barclays
Analyst Raimo Lenschow believes Microsoft’s strong Q3 numbers are “a testament to further progress in the broader transformation of the company” and predicts “strong results going forward.” He also sees Microsoft as a top safe-haven play for investors during periods of market uncertainty. Barclays maintains its Overweight rating on Microsoft and its $54 target for the stock.

Disclosure: the author holds no position in the stocks mentioned.