Microsoft Stock Gets Price-Target Hike Ahead Of Developer Show

By:  Patrick Seitz

Microsoft (MSFT) on Tuesday received a bullish report from an analyst who sees the company’s software developers conference as a possible catalyst for the stock. Microsoft stock was trading near record highs on Tuesday.

Oppenheimer analyst Timothy Horan reiterated his outperform rating on Microsoft stock. He also raised his price target to 127 from 120. Microsoft stock rose 1% to 113.21 on the stock market today. In intraday trading, it climbed as high as 113.69. That’s just below its all-time high of 113.73, reached last Thursday and Friday.

Microsoft’s Ignite 2018 conference will be held Sept. 24-28 in Orlando. Over 25,000 attendees are expected at the sold-out show.

Hybrid cloud-computing technology will be a focus at the developers conference, Horan said in a report. Microsoft will discuss improved capabilities and deeper integration for its Office 365, Azure, Dynamics, Teams and Skype offerings.

Microsoft To Chat Up Dynamics Business

“We expect Microsoft to talk up the opportunities surrounding its Dynamics business, which is attacking a large but fragmented market,” Horan said. “Microsoft’s suite of business productivity, customer relationship management (CRM), enterprise resource planning (ERP) and business communications tools is appealing to organizations that want to simplify vendor exposure.”

Horan believes Wall Street is underestimating the growth and profit-margin potential for Microsoft’s cloud-computing business. Cloud is now a third of Microsoft’s revenue and is growing 38% year over year.

“Microsoft is firing on all cylinders,” Horan said. “Cloud growth is robust, the transition to a (software-as-a-service) model is progressing well and the legacy business is holding up better than expected.”

Microsoft — along with Adobe Systems (ADBE) and Autodesk (ADSK) — is benefiting from the transition to pay-as-you-go internet cloud software from pay-upfront licensed software.