Back to Main

Nomura Stays Bullish on Microsoft Ahead of Windows 8 Launch (MSFT)

By: Dividend.com
Posted: 5/29/2012 9:15:00 AM
Referenced Stocks: MSFT

Software giant Microsoft Corporation ( MSFT ) on Tuesday caught some continued bullish support from analysts at Nomura Securities.

The firm maintained its "Buy" rating and $38 price target on MSFT, suggesting a 31% upside to the stock's Friday closing price of $29.06.

A Nomura analyst commented, "Next week, MSFT is expected to ship the Release Preview of Windows 8. We expect RTM to follow by 2-months and GA by Sep/Oct. Revenue recognition around tech guarantee coupons may shift Street revenue estates from June to Sept or Dec quarter, but will not be material. We will be attending E3 Jun. 5-7 and expect the focus to be on upcoming software titles and MSFT's entertainment platform. We do not expect news around the next generation Xbox, likely a 2013 event. Maintain 2012E/2013E EPS at $2.70/$3.10 vs. Street at $2.72/$3.06. We think the risk reward is favorable at 8.6x CY'12 earnings excluding $5.35 in net cash (tax effected for repatriation), and 7.3x EV to uFCF."

Microsoft shares rose 24 cents, or +0.8%, in premarket trading Tuesday.

The Bottom Line
Shares of Microsoft ( MSFT ) have a 2.75% dividend yield, based on Friday's closing stock price of $29.06. The stock has technical support in the $27-$28 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 .