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Stifel Restarts Microsoft (MSFT) at Buy; Says Can Thrive in 'Post-PC' Environment

May 4, 2012 11:38 AM EDT Send to a Friend
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Price: $40.01 -0.97%

Rating Summary:
    21 Buy, 24 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 9 | New: 22
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Microsoft (Nasdaq: MSFT) shares are trading lower with the rest of the stock market Friday despite some positive analyst comments earlier.

Stifel Nicolaus analyst Brad Reback restarted coverage on Microsoft with a Buy rating and $38 price target, suggesting 20 percent upside from where the stock is currently trading.

According to Reback, Microsoft will be able to compete in a post-PC world. In the near-term, the continued Windows 7 refresh cycle -- in particular with corporations, with average selling price is generally twice that of consumer units -- as well as Office and Server upgrades will bode well for the next couple of quarters.

On Windows 8, Reback sees the operating system as "solid" and said it will do well for Microsoft in the tablet market. Some caveats Reback has is the length at which its taken Microsoft to unveil and debut the product as well as the potential for less pent-up demand when compared with the XP to Windows 7 surge.

Reback also likes Microsoft's moves in cloud computing. The analyst noted Microsoft's "Windows Server, System Center, Azure, Office 365, Bing, Dynamics CRM, and many other products are being heavily utilized in customers’ private, public, and hybrid clouds." Windows 8 Server is also seen as being a big event for Microsoft and a potential driver to further upside for the company.

The stock last traded at $31.13, down nearly 2 percent on the session.




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