These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.
Microsoft
• MSFT-Nasdaq
Outperform • Price $337.20 on July 13
by Oppenheimer
We are increasing our price target for Microsoft to $410 from $330, based on 32 times calendar 2024 estimated earnings per share of $13, close to the 35x highs of 2020. We believe that Microsoft will improve on its already dominant enterprise IT position, as the only player with an integrated/AI platform, three actually, and with the key wholesale marketplace through Teams/Azure.
It can also uniquely integrate compute/networking/security services, which are converging. It has one billion Windows users and 1.5 billion devices; no one in the business segment comes close. It has access to its own and others’ enterprise applications and data, to drive network automation and novel services. AWS and Google should remain strong in wholesale, but neither has the customer base nor the front-end operating system and integrated applications.
U.S. Bancorp
• USB-NYSE
Buy • Price $33.74 on July 11
by BofA Securities
We upgrade our rating on U.S. Bancorp from Neutral to Buy. We believe investor focus on capital build has distracted attention from what is among the highest-quality franchises in the U.S. banking industry.
USB’s scale, earnings defensibility, and strong execution should drive superior EPS growth and stock outperformance, with shares trading at eight times 2024 estimated EPS, a discount to PNC Financial and Wells Fargo. The company has a resilient fee revenue base, bolstered by a differentiated payments business. The payments business offers upside optionality to stock valuation. Price…
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