Citi analyst Tyler Radke reduced the price target Microsoft (NASDAQ;) to $386.00 per share, to $355.00. This was due to lower PC growth as well as the incorporation of Nuance.

Ahead of Microsoft’s FQ3 earnings report, Citi’s reseller survey yielded constructive signals on MSFT’s commercial business.

“Resellers expect NTM growth to accelerate by 5pts vs. LTM (also an increase vs. last Q). This is in spite of the slight negative effect that 38% resellers have experienced from the conflict with Ukraine. Positive EA renewal growth is expected for 2022. We also note upsell momentum to O365 higher-tiers. The Teams collaboration is helping to boost this, as well as a notable uptick of Teams telephony/voice. This aligns with Enterprise Connect’s findings. In terms of quota achievement, 77% expect to hit accelerator, which we view as solid (and in-line with most of our prior surveys), although it does represent a slight downtick from last Q,” Radke said in a client note.

Moreover, the data points toward continued strength in Azure with the takeaways “ perhaps the most positive we’ve seen in the ~6 Qs we’ve run the survey.”

Microsoft stock closed yesterday at $280.52

By Senad Karaahmetovic