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In a report published Tuesday, Morgan Stanley analyst Keith Weiss reiterated an Overweight rating and $36.00 price target on Microsoft Corporation
MSFT.
In the report, Weiss noted, “With sentiment at an all-time low for MSFT, several potential catalysts into the second half of CY13 frame an attractive risk/reward scenario for the shares. Potential catalysts include; 1) improving PC unit growth, 2) outperformance in the S&T and EDD divisions, or 3) increasing exposure of the Cloud businesses. Windows 8 gives MSFT an improved story on tablets, a new leg of rev. growth and downstream opps. for synergy with phones. A quicker release cadence with Win ‘Blue' and better availability of touch-enabled devices in FY14 should improve cons. demand. Traction in tablets / smart phones remains a call option for MSFT. Microsoft currently trades at 10.5X CY13 EPS vs. the S&P at 14x — and has an attractive dividend yield at ~3.2%, suggesting limited downside. With negative sentiment vs. valuation fundamentals weighing on shares, execution on any of the opportunities above should begin to close the 20-50% discount to mega-cap technology peers.”
Microsoft Corporation closed on Monday at $32.61.
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