NEW YORK (TheStreet) -- Shares of Microsoft Corp (MSFT) are higher by 1.48% to $48.05 in early market trading Wednesday, after analysts at Deutsche Bank upgraded the company to "buy" from "hold" this morning.
The firm also raised its price target for Microsoft shares to $55 from $44, saying weak PC market sentiment is already priced into the stock at current levels.
Deutsche analysts added that they see more positive than negative catalysts, noting new investor enthusiasm for the computing giant's Azure and Office 365 products.
Redmond, Wash.-based Microsoft is engaged in developing, licensing and supporting a range of software products and services.
The company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software.
In addition, Microsoft develops video game consoles and digital music entertainment devices.
Separately, TheStreet Ratings team rates MICROSOFT CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICROSOFT CORP (MSFT) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MSFT's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.65 is very high and demonstrates very strong liquidity.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for MICROSOFT CORP is currently very high, coming in at 74.02%. Regardless of MSFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MSFT's net profit margin of 22.94% compares favorably to the industry average.
- You can view the full analysis from the report here: MSFT Ratings Report