Microsoft share prices to touch new highs with digital transformation wave, predicts Morgan Stanley

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Morgan Stanley Analyst – Keith Weiss, in his recently published note, projected high price target for Microsoft Corp. stock which reportedly increased from $80 from $72.

Microsoft stock price has been performing well right from the beginning of the year 2017, recording shares go up to 13.5 percent high so far this year.

Also Read: Microsoft records High profits due to web-based business software

Microsoft is back to showing durable double-digit EPS growth — and investors should be willing to pay a higher multiple for that growth,” said Keith in a note.

Microsoft’s business will rise due to the changing technology trends in computing, and AI (Artificial Intelligence). Due to the high demand of Microsoft’s Cloud computing platforms, analyst predicts that the company will perform ahead of the expectations next year.

Microsoft’s “top line drivers include the Azure (Microsoft emerging as a public cloud winner), data center (share gains and positive pricing trends), and O365 [Office 365] (base growth and per user pricing lift).” Weiss added further in his note.

Weiss presented three arguments in favor of his statement that showed why investors should expect company’s upward trajectory – I) High Market performance surpassing other companies, trading at a premium of 16%, II) High performing cloud, Office 365 along with non-cloud products like Xbox, Bing, Surface and machine-learning platforms, III) Better positioned than its peer companies due to steady and free cash flow.

He estimated an EPS (Earnings per Share) of $3.45 for Microsoft in the 2018 fiscal year as compared to Wall Street agreement for $3.32.

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