Last week,Microsoft has received a key upgrade from analysts at Goldman Sachs, who have admitted that the call they made more than two years ago was wrong. The stock has gained 84% since April 11, 2013, outperforming the S&P 500’s 29% gain over the same time frame. The Goldman team said they’ve upgraded the stock from Sell to Neutral and raised their price target from $45 to $57 per share.

Why Goldman upgraded Microsoft

In a report dated Dec. 18, Goldman Sachs analyst Heather Bellini said they did not appreciate that Microsoft stock would “disconnect” from all the downward earnings revisions. She also said they didn’t expect the stock’s upward multiple re-rating, which was driven by the cloud transition through Office 365 and Azure. Analysts from multiple firms have been praising Microsoft for its cloud transition for quite some time, and this appears to be the Goldman team’s final acceptance that there might be some successful execution going on here.

They named several positive catalysts that could be coming in 2016. First, they name success in the cloud transition, although many other firms’ analysts argue that we are already seeing this. Second, Bellini states that even though Microsoft is facing pressure on its gross margins, its gross profit dollars are able to keep growing.

Third, the Goldman team expects growth in non-GAAP earnings per share to serve as a catalyst in the near term, and fourth, they note that the company is in the process of moving past several headwinds. For example, the company is now more than a year past the benefit from the XP refresh, and Office 365 subscriptions are making up the decline in sales of the traditional Office suite. And finally, they believe Microsoft will accelerate itsdividend growth.

Microsoft’s multiple has doubled

Bellini notes also that consensus earnings estimates for the software giant have fallen 11% over the course of fiscal 2015 and 13% in fiscal 2016 from one year before the start of the fiscal year. However, she adds that the company’s NTM P/E multiple has doubled from ten times to 20 times as the stock trades at 20 times her calendar year 2016 earnings per share estimate of $2.77 per share. The Goldman team is significantly lower than the consensus at $2.94 per share.