Watching: Microsoft, Shopify and Air Canada

Air Canada will report its second quarter fiscal 2022 results on August 2. (Photo: 123RF)

What to do with Microsoft, Shopify, and Air Canada titles? Here are some analyst recommendations that prices are likely to move in the near future. Note: The author may have a completely different opinion than the one expressed.

Microsoft (MSFT, $268.74): Good performance where it counts

Microsoft missed analysts’ mark for its results for the fourth quarter of its fiscal 2022 ended June 30, but that’s not too much of a problem for Wedbush analyst Daniel Ives, who prefers to focus on the strength of the company’s 2023 guidance focused fiscal year.

The Redmond giant’s revenue hit $51.9 billion (billion U.S. dollars) and earnings per share came in at $2.23, below analyst expectations, which averaged sales of 52, had forecast $4 billion and earnings per share of $2.29.

The company says its results for the quarter were impacted by changes in exchange rates and weakness in PC sales, including due to Chinese containment measures.

“Although major titles are targeting lower-than-expected results, revenue from the strategic cloud and subscription areas has been resilient,” he says.

The Business Processes and Productivity division generated revenue of $16.6 billion, in line with analysts’ forecasts. For its part, the cloud services division brought in $20.9 billion in revenue, which it says is very respectable given its expectations of $21.1 billion.

“Financial markets have been waiting for Microsoft’s management forecast, which is an important barometer of corporate spending and demand for cloud services. Satya Nadella and his company did not disappoint and released robust forecasts for the quarter ended September,” he said.

Daniel Ives points out that for fiscal 2023, Microsoft’s management expects double-digit revenue and operating profit growth barring a 400 basis point headwind from currency translation rates. “This is great news for the tech industry as a whole,” he says.

The analyst reiterates his “outperform” recommendation for the stock and cuts its 1-year price target by $20, up from $340 to $320. Microsoft stock ended Wednesday’s session up 6.69% at $268.74.

Shopify (SHOP, $33.97, CA$43.75): Is The Worst Over?

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