Hark back to a year ago and Wall Street was reeling from 2022’s merciless bear market. Many of the top names were hit in the year’s tech rout, Microsoft (NASDAQ:MSFT) amongst them. However, as noted by Argus analyst Joseph Bonner, the tech giant’s comeback this year has been particularly impressive.
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“While MSFT shares were hit by the 2022 Technology sector selloffs,” said the 5-star analyst, “they have recovered in 2023 as the company has retaken its rightful place as an industry leader, though this has also driven the valuation modestly higher.”
Not high enough for Bonner’s stance to turn negative, though. In fact, just the opposite. The analyst has raised his price target from $390 to $430, suggesting the shares will now post growth of ~16% in the year ahead. That’s enough for Bonner to stick with his Buy rating on MSFT. (To watch Bonner’s track record, click here)
Along with the price target hike, Bonner has raised his FY24 non-GAAP EPS estimate from $11.37 to $11.47 and his FY25 forecast from $12.70 to $12.86. The EPS estimates suggest 14.5% growth over the next two years, higher than Bonner’s long-term earnings growth rate outlook of 11%.
It’s not hard to see why Bonner’s take is a positive one with the analyst noting that via its AI and cloud investments, Microsoft “continues to pursue long-term growth, and may just hold the premier position in business technology.”
While Microsoft is not completely shielded from broader economic challenges, such as the downturns in the PC OEM market and digital advertising, it possesses a highly diversified and robust portfolio of assets, making it one of the most resilient companies in the tech sector. In uncertain times, investors might view Microsoft as “a safe haven.”
The company also stands out as one of the few possessing a comprehensive, unified range of products designed to enhance “enterprise efficiency,” facilitate transformation to the cloud, encourage collaboration efforts, and support business intelligence. “It also has a large and loyal customer base, a large cash cushion, and a rock-solid balance sheet,” adds the analyst.
Bonner’s thesis receives almost unanimous support from his Wall Street colleagues. One skeptic aside, all 35 other reviews are positive, making the consensus rating a Strong Buy. Going by the $415.77 average target, a year from now, investors will be pocketing returns of 12.5%. (See Microsoft stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
