KeyBanc Believes Microsoft (MSFT) Still Has Room to Grow


In a report released yesterday, Brent Bracelin from KeyBanc maintained a Buy rating on Microsoft (NASDAQ: MSFT), with a price target of $123. The company’s shares closed on Friday at $114.26, close to its 52-week high of $115.29.

Bracelin noted:

“We would continue to Overweight MSFT shares on a multi-year model transformation driven by fast-growing cloud and Internet segments that we estimate could top $70B in revenue by CY20 vs. $18.5B in CY16. Demand appears robust based on proprietary Data ahead of Microsoft’s annual Ignite user event, which kicks off Monday. We expect enterprise cloud assets including to headline the event. Consumer gaming demand trends appear robust this quarter. Gaming represents about 9% of Microsoft’s total revenue but last quarter posted 39% y/y growth driven by new Xbox and Fortnite tailwinds. Importantly, we estimate gaming accounted for ~40% of the revenue beat last quarter.”

According to TipRanks.com, Bracelin is a top 25 analyst with an average return of 26.0% and a 78.5% success rate. Bracelin covers the Technology sector, focusing on stocks such as Tyler Technologies, Salesforce.com, and Everbridge Inc.

Microsoft has an analyst consensus of Strong Buy, with a price target consensus of $121, implying a 5.9% upside from current levels. In a report issued on September 10, Credit Suisse also maintained a Buy rating on the stock with a $125 price target.

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Microsoft’s market cap is currently $877.2B and has a P/E ratio of 54.15. The company has a Price to Book ratio of 10.60.

Based on the recent corporate insider activity of 98 insiders, corporate insider sentiment is negative on the stock.

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