Microsoft (MSFT) stock might be sitting 9% into the red in 2021, but according to Tigress analyst Ivan Feinseth, the weak performance so far is only a blip on the way to further gains.
In fact, the 5-star analyst recently not only reiterated a Buy rating for the shares but also raised the price target from $366 to $411, implying investors will see returns of ~34% in the year ahead. (To watch Feinseth’s track record, click here)
What’s behind Feinseth’s bullish thesis? The analyst explained, “Ongoing enterprise digitization continues to drive increasing cloud migration and greater productivity technology adoption and will continue to drive significant revenue and Economic Profit growth.”
Success should continue apace with both large and small enterprises’ ongoing adoption of Cloud, Office, and Teams. Cloud adoption is continuing at a rapid clip, but Feinseth singles out the continued enhancement of Teams’ capabilities, with SMBs targeted in the recently launched Teams Essentials. Teams saw out the last quarter boasting more than 270 million users.
But of course, Microsoft is also at the forefront of gaming. The recently announced $70 billion acquisition of Activision Blizzard amounts to the gaming industry’s largest ever M&A transaction and will “further expand its gaming position and position it to provide an integral entertainment initiative in the Metaverse.” With the addition of blockbuster titles such as World of Warcraft, Candy Crush, Guitar Hero, Diablo, and the “mega” Call of Duty series, it also positions Microsoft as the third-largest gaming company by revenue in the world.
The company also has its fingers in other pies. The tech giant bought AT&T’s digital advertising and analytics business Xandr for a purported ~$1 billion while a new partnership with CVS Health was also recently announced and should “further enable CVS’s digital transformation.”
Finally, with a balance sheet boasting excess cash of $123.14 billion - $16.41 per share – Feinseth expects Microsoft will “continue to fund ongoing growth initiatives and business-expanding strategic acquisitions as well as enhance shareholder returns through further dividend increases and share repurchases.”
So, that’s one analyst’s view, what does the rest of the Street think the future holds for Microsoft? Good times, in a nutshell. The stock has a Strong Buy consensus rating based on a full house of Buys only- 28, in fact. Going by the $375.30 average price target, shares will climb ~22% over the one-year timeframe. (See Microsoft stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.