FNArena’s Weekly Insights – April 15 2024
In this week’s Weekly Insights:
-Shaky Sentiment Ahead Of Corporate Updates
-Everybody’s A Gold Bull
-Best Buys & Conviction Calls
By Rudi Filapek-Vandyck, Editor
Shaky Sentiment Ahead Of Corporate Updates
Analysts at Morgan Stanley made a big hullabaloo about it, as would I if ever I came to walk into their shoes, with early market leadership in Generative AI now projected to result in Microsoft doubling its earnings per share by FY29.
Let’s pause for a few seconds and think about this a little longer. Microsoft, one of the largest companies of our time, generating some US$244bn in annual revenues, of which US$107bn ends up as operating income, with free cash flow estimated in excess of US$63bn, is set to double its profits for shareholders over the next five years.
For the mathematically gifted among us, doubling profits in five years requires a cumulative annual growth rate (CAGR) of circa 14.87% per year. Morgan Stanley’s recently updated projections are actually above that with revenues expected to grow at a CAGR of 14% and EPS at 16% per annum.
Hence, to be precise about this: Microsoft is projected to MORE than double its EPS in the next five years.
