Goldman raises Microsoft target post-strong results
* Raises price target by $1 to $32
* Says new product cycle positive for top-line growth
July 23 (Reuters) - Goldman Sachs raised its share-price target on Microsoft Corp (MSFT.O) by a dollar, a day after the company's fourth-quarter profit trumped Wall Street estimates.
"Microsoft beat expectations for the third consecutive quarter, primarily on the strength of Windows 7, but helped by a slew of product cycles in other divisions," Goldman Sachs said in a note to clients. On Thursday, the world's largest software company posted a 48 percent rise in quarterly profit, with all of its five divisions posting higher sales, but two key units -- online services and entertainment and devices -- saw wider operating losses. [nN21206486]
Microsoft's stock has rallied in recent weeks, outperforming the Nasdaq composite index. But as Apple Inc (AAPL.O) has overtaken Microsoft as the world's largest tech company by market value about a month ago, analysts question where growth will come from after Windows 7 and Office 2010 run their course.
Product cycles highlight a return to innovation; a positive for top-line growth even with a more choppy macro backdrop, Goldman Sachs said.
The company hopes to excite consumers with a range of Windows-powered tablet devices and its untested Kinect motion gaming platform. [nLDE66C03S] Shares of Microsoft closed at $25.84 Thursday on Nasdaq.
(Reporting by Mary Meyase in Bangalore; Editing by Unnikrishnan Nair)
((mary.meyase@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: mary.meyase.reuters.com@reuters.net)) Keywords: MICROSOFT/RESEARCH GOLDMAN
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