Proactive Investors - Microsoft Corporation (NASDAQ:MSFT) could guide to double-digit reported revenue growth for the year as cloud consumption shows signs of accelerating, according to Jefferies analysts.
In an update to clients, they boosted their target price on Microsoft stock by 20% to $400 per share, while maintaining a ‘Buy’ rating, attributing the recent share-price decline primarily to multiple compression.
"We view Microsoft as better positioned than most (AI & improving cloud consumption) and remain fans of the long-term consolidation story," the analysts wrote.
Microsoft will report its fiscal first-quarter 2024 financial results after the market closes on October 24, 2023, and the analysts at Jefferies are looking for qualitative and quantitative commentary regarding AI's impact on its revenue, specifically details on M365 Copilot's progression and its impact on the company's 2Q and full-year 2024 financial results.
The Zacks consensus estimate is for earnings per share (EPS) of $2.65 on $54.4 billion in revenue.
For the current quarter, their focus remains on Azure growth and believe 8% constant currency growth is achievable but expect 2Q guidance and full-year 2024 commentary to be prudent.