Zacks Investment Research upgraded shares of Microsoft Corporation (MSFT) from UNDERPERFORM to NEUTRAL on December 19, 2013, with a target price of $38.00.
Microsoft is one of the largest software companies in the world. Its operating systems are installed on the majority of computers anywhere in the world. Fiscal first quarter 2014 earnings exceeded the Zacks Consensus Estimate. The reorganization of the business and "devices and services" model are encouraging, but execution risks are considerable. The departure of CEO Ballmer at this juncture may be a good thing, but does not alleviate near-term uncertainties. Additionally, competition remains stiff and Microsoft's dominant position in the PC market continues to be challenged by new-age devices. However, considering the fact that the promising new products, enterprise refresh cycle and cost reduction initiatives will continue to generate sizeable cash flows, we are raising our recommendation to Neutral.
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