Citizens Maintains Market Outperform on Microsoft, $550 Price Target

Citizens analyst Patrick Walravens reiterated a Market Outperform rating and $550 price target on Microsoft (NASDAQ: MSFT).

“We maintain our Market Outperform rating and $550 price target on Microsoft after the company reported better-than-expected 4Q26 results, with non-GAAP EPS of $4.74 (consensus $4.24) on revenue of $90.0B (consensus $87.6B), up 18% y/y, flat with last quarter, Azure growth of 43% on a constant currency basis (consensus 40.3% cc), versus 39.0% cc last quarter, 30M Copilot seats, up from 20M last quarter, total CapEx of $41.0B (a bit better than the consensus of $42.4B), and free cash flow of $19.6B (consensus $17.4B), all of which left the stock up 9%, after decreasing 17% year-to-date versus an increase of 7% for the S&P 500. • Microsoft guided to 1) F1Q27 revenue of $89.85B-$90.95B, up 17% y/y at the midpoint (consensus $89.7B), Azure revenue growth of 45% in constant currency (consensus 41.5%), and CapEx including finance leases of over $50B (consensus $56B); 2) decreased its CY26 CapEx guidance to $175B from $190B, due to the company extending the estimated useful life of its data centers and office buildings; and 3) “double-digit” FY27 revenue growth, FY27 capital expenditures to “grow year-over-year,” and Azure “H1 growth to accelerate.””

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