Collins Stewart Reiterates a 'Buy' on Microsoft (MSFT); Weak PC’s Are Offset Elsewhere, and Likely Begin to Get Better
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Price: $34.87 +2.32%
Rating Summary:
23 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
23 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
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Collins Stewart reiterates a 'Buy' on Microsoft (NASDAQ: MSFT) price target of $33.00.
Collins analyst says, "MSFT raised alarm bells for a lot of investors including ourselves last week when they made cautious comments about PC demand in the December quarter that were widely covered by the media. Our fear, which we think others shared, was that PC weakness might help drive overall F2Q12 results to be worse than expected. However, while PC results did come in worse than our lower than consensus estimate, it was offset by better Business Division and Xbox revenues while EPS was aided by lower operating expenses, resulting a quarter with in-line revenues and better-than-projected EPS. The weak PC results are a concern, though should be at or near their lowest point as HDD availability should improve over time (or simply not get worse) while the negative effect from channel inventory drawdowns (which reduced MSFT’s Y/Y growth 5% in F2Q12) should reach their limitations. In addition the negative impact from netbooks continues to wane and Ultrabooks could provide upside to PC growth in 2012. With improving PC performance and anticipation of the 2012 launch of Windows 8, we believe MSFT shares could warrant a higher P/E multiple and hence are reiterating our rating."
For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.
Shares of Microsoft closed at $28.12 yesterday, with a 52 week range of $23.65-$29.46.
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Collins analyst says, "MSFT raised alarm bells for a lot of investors including ourselves last week when they made cautious comments about PC demand in the December quarter that were widely covered by the media. Our fear, which we think others shared, was that PC weakness might help drive overall F2Q12 results to be worse than expected. However, while PC results did come in worse than our lower than consensus estimate, it was offset by better Business Division and Xbox revenues while EPS was aided by lower operating expenses, resulting a quarter with in-line revenues and better-than-projected EPS. The weak PC results are a concern, though should be at or near their lowest point as HDD availability should improve over time (or simply not get worse) while the negative effect from channel inventory drawdowns (which reduced MSFT’s Y/Y growth 5% in F2Q12) should reach their limitations. In addition the negative impact from netbooks continues to wane and Ultrabooks could provide upside to PC growth in 2012. With improving PC performance and anticipation of the 2012 launch of Windows 8, we believe MSFT shares could warrant a higher P/E multiple and hence are reiterating our rating."
For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.
Shares of Microsoft closed at $28.12 yesterday, with a 52 week range of $23.65-$29.46.
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