With Microsoft (MSFT) shares down about 20% over the last month – and 4% yesterday – a number of analysts this morning came riding to the company’s defense.
- Goldman Sachs analyst Sarah Friar repeated her Buy rating on the stock; she asserts that the stock’s valuation is “compelling,” trading at just 9.7x CY 2011 estimates, versus 18.8x for the average software stock, and 11.9x for the S&P 500. She notes that the stock trades at 10x FY 2011 estimates EPS, versus an average since 2004 of 15.9x. She keeps her $38 target – 52% above yesterday’s close.
- UBS analyst Brent Thill likewise repeats his Buy rating and $38 target on the stock; he notes that the Microsoft sell-off since late April is about in line with similar deterioration by Oracle, Autodesk and Symantec. He notes that it is true that the company’s challenged position in mobile is a long-term issue, but accounts for under 1% of revenue. He adds that the possibility of a “mega” M&A deal is low.
- Morgan Stanley analyst Adam Holt repeats his Overweight rating, although he trimmed his price target to $35, from $38. Holt notes that the company has less foreign exchange exposure than some other large caps, and he says FY 2011 forecasts “look reasonably conservative” given a strong product cycle, which should let the company absorb macro weakness better than most. The 20% slide in the last month, he says, “likely overshoots the real estimate risk.” Writes Holt: “We like the risk reward here.”
Earlier: Microsoft: FBR Upgrades On Strong Product Cycles Through 2011
MSFT today is up 98 cents, or 3.9%, to $25.99.
No comments:
Post a Comment