April 28 - Microsoft (MSFT, Financial) heads into its fiscal third-quarter earnings report on April 30 with a "de-risked" outlook, according to Jefferies, which cited easing comparisons and favorable foreign exchange moves.
Analyst Brent Thill said in a Sunday note that he expects Microsoft's revenue to climb 11% year over year, aided by a slightly easier comparison and currency tailwinds. Thill added he anticipates the company will issue cautious guidance for the fiscal fourth quarter, partly reflecting broader macroeconomic uncertainty.
Jefferies maintained a "Buy" rating on Microsoft with a $475 price target, pointing to the company's consolidation strategy and what it called an attractive valuation at 24 times calendar 2026 earnings estimates, a discount compared to peers.
Potential positives for the upcoming report include strength in Microsoft 365 Commercial Cloud and Copilot, as well as easing capital expenditure trends. Early earnings results from other technology firms have also been more resilient than expected, Jefferies noted.
However, growth in Microsoft's Azure unit may land at the lower end of guidance ranges, as it has in two of the past three quarters, which could temper sentiment, Thill warned.
Analysts, on average, forecast Microsoft to post earnings of $3.22 per share on $68.43 billion in revenue.
