The firm gave an update on its stance in light of Gartner's recent PC preliminary data which showed worldwide first-quarter PC unit shipments decline 1.7% year over year and 7.6% quarter to quarter.
Though PC shipments continue to fall, Credit Suisse notes that the March quarter was the slowest quarter-to-quarter decline of the past eight March quarters. It was also the lowest year-over-year fall in eight consecutive quarter.
"The U.S. market, which is Windows' highest ASP geography with the lowest levels of piracy, showed the fourth consecutive quarter of shipment growth, which suggests the U.S. has passed the worst stages of the decline in shipments after having been the first region to be significantly impacted by the growth in tablets," wrote analyst Philip Winslow in the report.
Credit Suisse said it expects Microsoft to return to double-digit EPS growth and that a number of near-term options exist for the company to offer shareholder value.
According to Winslow, options include: "(1) rationalizing the cost structure of the company, (2) potentially divesting/exiting underperforming/non-core businesses, (3) optimizing the capital structure (e.g., raising debt against off-shore stockpiles of cash), (4) increasing the level of buybacks/dividends, and/or (5) accelerating the shift to Office 365 (i.e., "pull a full Adobe")."
The firm said these changes could potentially push price targets into the high-$40s.
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