Citi Cuts Microsoft Target to $570 as Software Valuations Compress
Updated
Updated · Barchart · Jul 18
Citi Cuts Microsoft Target to $570 as Software Valuations Compress
3 articles · Updated · Barchart · Jul 18
Summary
$570 is Citi's new price target for Microsoft, down from $620, though analyst Tyler Radke kept a Buy rating ahead of the company's fiscal fourth-quarter results.
Software multiple compression drove the cut, with Microsoft still caught in the sector reset after Azure growth eased slightly and the IGV software ETF fell more than 20% from its peak.
Microsoft's latest operating results remained strong: fiscal Q3 revenue rose 18% to $82.9 billion, net income climbed 23% to $31.8 billion, and Microsoft Cloud revenue increased 29% to $54.5 billion.
The stock is still under pressure despite those numbers, down 23% over 52 weeks and 18.6% year to date, even as it now trades at 20.51 times forward earnings versus a 24.29 sector average.
Wall Street remains broadly bullish into the July 29 earnings report, with 50 analysts rating Microsoft a Strong Buy and assigning an average target of $546.29.