Bullish forecasts for Microsoft: Dynamics 365 a key driver of cloud success

Ahead of next week's Microsoft earnings report, two new investment analyst notes forecast bright prospects for the company's share price and financial performance over the next few years. And both analysts see Dynamics 365 solutions playing a measurable role in that success.

Richard Davis at Canaccord Genuity Group Inc. expects Microsoft's market cap to grow from the current market cap of around $700 billion to $1 trillion by as early as 2019, as reported by Investopedia, fueled by continued revenue growth and improving margins in its newer, higher-growth cloud business lines. The Office 365 product suite, for example, will comprise a larger percentage of the company's total revenue as time goes on, Canaccord believes. Dynamics 365, Azure, and gaming all make the list as potential growth engines.

And yesterday, analyst Christober Eberle of Instinet set a new price target for Microsoft at $102 (the stock currently sits at about $92.70), according to reporting from Barrons. Eberle also pointed to expectations for growth in cloud offerings including Office 365, Dynamics 365, and Azure, as well as gaming.

Barrons quoted from Eberle's report:

"We estimate total Dynamics to be a >$5bn/year business by CY'20, with $4.5bn of that coming from Dynamics 365, up from $1.6bn in CY'17, which could prove conservative if share gains are greater than currently estimated."

And a recent Thomson Reuters report culled from 36 analysts also puts Microsoft at a buy rating and a long-term growth forecast of 10.7 percent.

Prior to these most recent analyst estimates, statements by ...