Air Canada will release its second quarter fiscal 2022 results on August 2. (Photo: 123RF)
What to do with titles from Microsoft, Shopify and Air Canada? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed.
Microsoft (MSFT, US$268.74): Good performance where it counts
Microsoft missed analysts’ mark for its results for the fourth quarter of its fiscal year 2022 ended June 30, but that’s not too much of a concern for Wedbush analyst Daniel Ives, who prefers to focus on the strength of the company’s guidance. for its 2023 financial year.
The Redmond giant’s revenue reached 51.9 billion US dollars (US$B) and earnings per share were US$2.23, below analysts’ expectations, which on average had forecast revenue of 52, US$4 billion and earnings per share of US$2.29.
The company says its results for the quarter were affected by changes in currency conversion rates and weaknesses in personal computer sales, among other things due to Chinese containment measures.
“Even though major titles are targeting lower-than-expected results, revenue from the strategic cloud and subscription divisions has been robust,” he says.
The Business Processes and Productivity division generated revenues of $16.6 billion, in line with analysts’ forecasts. The cloud services division, for its part, collected revenues of $20.9 billion, which in its opinion is very respectable, since expectations were for $21.1 billion.
“The financial markets were awaiting Microsoft’s management forecast, which is an important barometer for business spending and demand for cloud services. Satya Nadella and company did not disappoint, releasing robust guidance for the quarter ending in September,” he said.
Daniel Ives points out that Microsoft management expects double-digit revenue and operating profit growth for its fiscal year 2023, excluding a 400 basis point headwind from currency translation rates . “This is great news for the tech industry as a whole,” he says.
The analyst reiterates his recommendation of “outperformance” on the stock and lowers his target price over one year by US$20, which goes from US$340 to US$320. Microsoft shares ended Wednesday’s session up 6.69% to $268.74.
