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BMO Capital Markets analyst Keith Bachman lowered the firm’s price target on Microsoft (NASDAQ:MSFT) from $345 to $305 per share in a note to clients on Friday.
The analyst said they are lowering the June quarter and FY23 revenue assumptions due to FX while they are maintaining CC revenue growth assumptions.
“Given macro headwinds, including weakness in the PC market, we believe that our CC assumptions are reasonable, though we think MSFT’s future results could have less upside tension than in recent quarters. However, given the depth and breadth of MSFT’s portfolio combined with current valuation, we believe that MSFT remains deserving of an Outperform rating,” said Bachman.
BMO lowered its upcoming June quarter and FY23 estimates to reflect increasing FX headwinds.
“We believe that FX headwinds have increased since MSFT’s FX update in early June. Nevertheless, we think MSFT’s FX headwinds are well understood by investors, though are not fully reflected in Street estimates, particularly for FY23,” said the analyst. “We believe that the PC market continues to weaken, which raises the probability of headwinds to Windows OEM Non-Pro and Surface revenue in FY23, in our judgement.”
Bachman also stated that after working with the firm’s semiconductors team, they think recent total notebook ODM shipments have been lighter than expected, and “channel checks have indicated that weakness has spread to the commercial market.”
