Bullish
Rating: Buy
Price target: $55
"While investors were already bracing for a mixed print [i.e. earnings report] given the weak PC market and disappointing results from ORCL, SAP and IBM, we conclude that MSFT’s 4QF15 results still fell short on the back of weak enterprise/server numbers, gross margin pressure from the out-performance in lower-margin Surface/Xbox, an EPS beat that came largely from non-recurring gains and light 1QF16 non-GAAP revs guidance (of $21.0b, $900m below our estimate).
"While the quarter wasn’t pretty, this growth outlook is solid in light of the PC market pressures (which should stabilize in the coming quarters), emerging markets weakness and the tough enterprise IT spending backdrop."