BofA/Merrill Lynch Upgrades Microsoft (MSFT) to Neutral

BofA/Merrill Lynch upgraded Microsoft (NASDAQ: MSFT) from Underperform to Neutral with a price target of $47.00 (from $35.00) following Q4 results.

Analyst Kash Rangan said concerns have not been met with the degree of investor concern they had anticipated. Instead shares have been driven by 1) directional comments on cost cuts – in that regard, the cost containments leading to F15 opex of ~$34 bn on today’s earnings call is better than we had expected; 2) Nokia accretion in F16 versus fears that MSFT will engage in price competition is a relief despite the fact that Street F15 EPS estimates will come down for Nokia dilution and 3) Bing will break even in F16.

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 $44.83 yesterday.

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