Microsoft’s stock drop of 28% so far in 2022 amid growth concerns now looks overdone, Morgan Stanley says.
“While investors worry forward numbers have not been de-risked, we see a strong (and durable) demand signal in the commercial businesses, which should lead to improving revenue and EPS growth in 2H23,” Morgan Stanley analyst Keith Weiss wrote in a note on Tuesday.
As a result, the valuation of the tech giant is too cheap to ignore, Weiss contended.
“Trading at ~20x CY24 GAAP earnings, accelerating EPS growth should bring investors back to the name,” Weiss added.
Here are more details on Morgan Stanley’s defense of Microsoft stock:
Rating: Overweight (reiteration)
Price Target: $307 (raised from $296)
Fiscal Year 2023 EPS Estimate: $9.51 (consensus: $9.55)
Weiss acknowledged investors have valid concerns about the near-term path of Microsoft’s growth based on current economic conditions.
“Near-term investor concerns around Microsoft typically fall into two categories,” Weiss said,…
This article was written by and originally published on finance.yahoo.com