Nomura Reiterates Neutral Rating on Microsoft Following Xbox One Presentation

In a report published Tuesday, Nomura analyst Rick Sherlund reiterated a Neutral rating and $38.00 price target on Microsoft MSFT.

In the report, Nomura noted, “Xbox has a rich ecosystem of game content, realistic graphic and lifelike video, layers on top of set top box for personalized voice and gesture commands with Kinect motion sensor, programming guide and Skype integration. The price is high at $499 versus Sony's new PlayStation 4 at $399, both due out for upcoming holiday season. Xbox One cannot carry the burden alone for Microsoft's traction in the consumer market and the leverage Microsoft had hoped for it is unlikely to be realized. We think the stock goes higher, driven by solid enterprise business, some shift in focus to cloud-based services and the potential for greater shareholder activism that advocates for steps to improve shareholder value.”

Microsoft closed on Monday at $35.47.