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The software company is handing out trial versions of Windows 8 computers with
ARM Holdings(ARMH) processors to try to better compete with
Apple(AAPL) and its iPad, according to
"Our thesis on Microsoft remains unchanged, as we believe the stock is only reasonably undervalued at current levels; we don't expect to see much lift until Windows 8 is released and/or Windows Phone shows some traction in the Smartphone market," Wells Fargo analysts wrote in a report on Jan. 20. "We believe multiple expansion is largely predicated on the company making demonstrable inroads in mobile computing."
Shares of Microsoft hit a 52-week high Thursday of $30.80. The stock's 52-week low of $23.65 was set on June 16.
Microsoft has an forward price-to-earnings ratio of 10.23X; the average for software companies is 32.14X. For comparison,
Oracle(ORCL) has a lower forward P/E of 11.21X and
Intuit's(INTU) forward P/E is 17.38X.
Of the 40 analysts who cover Microsoft, 26 rated it a buy. Thirteen analysts gave the software company a hold rating and one rated it a sell.
TheStreet Ratings gives Microsoft an A- grade with a
$34.59 price target on the shares. The stock has risen 18.37% year to date.