Goldman Sachs upgrades Microsoft stock from sell to neutral, admits "we were wrong"

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Is Microsoft’s Satya Nadella led plan to turn the company around beginning to work? Some financial analysts seem to think so, and today investment firm Goldman Sachs upgraded their guidance on Microsoft’s stock, moving it from a “sell” rating to “neutral”. The stock has been trading near all time highs, and currently sits at just above $55, down a bit for the day.
The firm has set a price target on Microsoft stock at $57, and Goldman analyst Heather Bellini said the company is increasing their estimates, “driven primarily by faster gross margin expansion in Office 365 and Azure”. While Bellini thinks that consensus on the stock is still too high, Microsoft’s successful transition to the cloud has led to the new rating. “We were wrong” on the sell rating, Bellini admitted in a note to clients.
Bellini continued, as reported by, to categorize Microsoft’s new position:

We see the following positive fundamental catalysts in 2016:
Continued successful transition to the cloud.
Despite gross margin pressure, gross profit dollars can continue to grow.
Positive non-GAAP EPS growth should serve as a near term catalyst.
Moving past multiple headwinds (over a year past the XP refresh benefit, with Office 365 making up for the decline in traditional Office).
We expect accelerating growth in dividend.

Microsoft has been aggressive with marketing Office, and especially Office 365, as a cross-platform solution for information workers, bringing Office 365 to iOS and Android, and offering continually growing value for the subscription service. Azure, too, has been getting a lot of attention from the company, building on a core of regional data centers that offer in-country data storage for many businesses, and competing not only in cloud services, but leading the way in hybrid cloud solutions that offer companies ways to keep critical data on-premises while using the cloud for data storage.

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