Microsoft Corp. wrapped in a massive cybersecurity attack at the end of last year, but the unprecedented harassment could be positive for the company ‘s bottom line.
UBS analyst Karl Keirstead, who has a $ 243 buy and price target, while Microsoft MSFT, said
results were leaked by hackers in the attack on SolarWinds Corp.’s SWI,
Orion’s IT management software as they are common, “the wider cyber-security community is not pointing to Microsoft’s branches.”
Keirstead noted that the attack actually led to more customers entering public cloud infrastructures like Azure, AMZN at Amazon.com Inc.
AWS, and GOOG at Alphabet Inc.,
GOOGL,
Google Cloud commented that “cloud data centers are more secure and constantly capturing / updating on-premises software such as Orion poses a security risk that can be transferred to Microsoft, Amazon or Google.”
“Basically, we think this cyber-security attack could be a very optimistic net for Microsoft,” Keirstead said.
Analysts expect Microsoft’s Intelligent Cloud division, which includes the company’s Azure public cloud platform, to bring in $ 13.77 billion in revenue, up 16% from a year ago when which Microsoft will report on fiscal earnings in the second quarter after the bell Thursday.
Microsoft only breaks down percentage gains for Azure from a year ago without specifying a dollar amount. Azure gains were at 59% in the first quarter of fiscal 2021, 47% for the fourth quarter of fiscal 2020, 59% in the third quarter, and 62% in the second quarter of last year.
What to expect
Earnings: Of the 28 analysts surveyed by FactSet, Microsoft is expected to post an average earnings of $ 1.64 a share, up from the $ 1.61 share expected at the start of the quarter and the $ 1.51 share reported in the year. second quarter a year ago. Estimate, a software platform that uses crowdsourcing from hedge fund executives, insiders, buy-in side analysts and others, seeking earnings of $ 1.69 a share.
Income: Wall Street expects revenue of $ 40.23 billion from Microsoft, according to 25 analysts surveyed by FactSet. That’s down from the $ 40.48 billion forecast at the start of the quarter, but up from the $ 40.72 billion reported in the quarter a year ago. Estimate expected revenue of $ 40.72 billion.
Stock transfer: Over the quarter that ended in December, Microsoft shares rose 5.8%, compared to a 10.2% increase over the Dow Jones industrial average DJIA,
which includes Microsoft as part. Similarly, the S&P 500 SPX index,
rose 11.7%, and the Nasdaq Composite Index COMP tech-heavy index,
rose 15.4%.
What analysts say
Morgan Stanley analyst Keith Weiss, who has a fat rating and a $ 260 price target, said that while investors may be targeting Microsoft ‘s headlines, he sees an opportunity due to the weakness of the stock in the software department. While Microsoft’s stock has grown 35% in the past 12 months, the iShares ETF IGF Extended Software Technology Division,
has grown 43%
“After clearing the difficult Q2 product cycle comps and lingering COVID effects, a strong global and multifaceted environment makes MSFT a key stock of the recovery,” Weiss said. Analyst Morgan Stanley expects 41% growth in Azure in the second quarter, and 41.6% growth in fiscal 2021.
Citi Research analyst Walter Pritchard, who has a $ 272 purchase target and price target, will see marginal heads in Microsoft’s game industry, and expects continued PC strength to make up for a weakness in server and office licensing .
“We are seeing a positive situation around key frontline metrics for Microsoft, with Azure metric growth seemingly upside and Azure numbers moving forward higher here after strong contract signs and consumption signals,” he said. Pritchard.
Mizuho analyst Gregg Moskowitz, who has a $ 255 buy rate and price target, sees Azure’s 48% year-over-year growth.
“We argue that Azure is becoming more powerful, and that MSFT has amassed an impressive pool of cloud assets that will continue to drive strong growth for a company of its size,” Moskowitz said.
Of the 33 analysts covering Microsoft, 31 have a buy rating and two have a rating, along with an average target price of $ 248.19, according to FactSet data.