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Nomura Maintains “Buy” on Microsoft; Risk/Reward Looks Favorable Following E3 Event (MSFT)

By Dividend.com,  June 06, 2012, 09:16:58 AM EDT

Software superpower Microsoft Corporation ( MSFT ) on Wednesday received some continued bullish support from analysts at Nomura Securities.

The firm reiterated its "Buy" rating on MSFT as well as its $37 price target, which suggests a 30% upside to the stock's Tuesday closing price of $28.51.

A Nomura analyst commented, "At this week's E3, we attended MSFT's Xbox press event and held an investor meeting with Mitch Koch, CFO of the Interactive Entertainment Business. Much of the focus at the Xbox press event was on upcoming software titles, and the expansion of the Xbox entertainment platform. MSFT also announced new applications that would leverage the Xbox platform across the Windows ecosystem. Microsoft announced that it will be doubling the entertainment content available on the Xbox over the next year. We think the risk reward is favorable at 6.8x CY'13 earnings excluding $5.35 in net cash (tax affected for repatriation), and 6.5x EV to uFCF."

Microsoft shares rose 30 cents, or +1%, in premarket trading Wednesday.

The Bottom Line
Shares of Microsoft ( MSFT ) have a 2.81% dividend yield, based on last night's closing stock price of $28.51. The stock has technical support in the $26-$27 price area. If the shares can firm up, we see overhead resistance around the $31-$32 price levels.

Microsoft Corporation ( MSFT ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: MSFT



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