Deutsche Bank Reiterates Buy Rating On Microsoft Corporation (MSFT) Stock

According to a research note published on Wednesday, Deutsche Bank has reiterated a Buy rating on Microsoft Corporation (NASDAQ:MSFT) stock with a price target of $55. The sell-side research firm hosted a lunch meeting on Tuesday with approximately 20 investors to exchange insights on Microsoft.

Deutsche Bank noted that the stock has been trending down modestly after hitting a peak of $49 in late April. The firm believes that the downward trend is due to unusual strong move in the stock, following the March quarter results as well as recent weak PC market news. The investors mostly focus on cloud transition, the state of the PC market, and how the stock would react if Microsoft was to acquire Salesforce.com, Inc. (NYSE:CRM).

The bull case focuses on the cloud transition story, with Office 365 and Azure now providing 7% of the revenue mix and growing more than 100%. The operating expense story and the stability of Microsoft’s Server product revenue were mentioned far less in the bull scenario. The bulls also argued that the pending Windows accounting change and associated GAAP earnings per share (EPS) cuts are in the stock already, as are weak PC market trends.

The bearish side of the investors focuses on near-term and secular PC growth concerns with consensus view mixed at best, without any Win 10 lift in the second-half of 2015. The bears also discuss skepticism about the cloud transition, mostly saying that is it a drag on margins or will it cannibalize on-premise workloads. The bears also question about Office 365 growth being offset by the decline in traditional license Office.

Deutsche Bank analyst, Karl Keirstead stated, “We conclude that the weak PC market is largely in the stock (the PC-centric Windows OEM business is now just 12% of MSFT’s rev mix), the cloud transition story is additive and will lift sentiment for some time.” He further added that Microsoft’s valuation multiple will appear more reasonable to the skeptics as EPS growth recovers in fiscal-year 2016 (FY16).

According to Bloomberg, 23 analysts rate Microsoft stock a Buy, 14 recommend it a Hold, and only seven tag a Sell. The consensus 12-month price target on the stock is $49.9 showing an upside potential of 9.6% on the current trading price.

The stock is currently trading down 0.87% at $45.43 as of 1:06 PM EDT. Since the start of the year, the stock experienced a decline of 3.42% with an average daily trading volume of 29.27 million shares.

Nintendo's E3 2015 Event Highlights: Super Mario Maker, Star Fox Zero, Zelda, and More

Nintendo has been somewhat of an anomaly at E3 in recent years. Instead of going up toe to toe against Sony and Microsoft, the Kyoto-based company has been content with hosting its own smaller events across the year dubbed as Nintendo Direct. This year, there was an E3 edition of its Nintendo Direct. While other console makers and game publishers have their E3 conference live, the Nintendo Direct was shot earlier and released to the public today. Here's what was worth checking out from Nintendo's special E3 Nintendo Direct.

                                   

1. Super Mario Maker will let you make your own Mario gamelevels

Level creation tools in games are nothing new. But with Nintendo putting its hat into the ring with Super Mario Maker, you can be assured that gamers will take notice. This Wii U exclusive will let you craft a slew of levels based on the side-scrolling Mario games, ranging from the classic Super Mario Bros. all the way up to New Super Mario Bros. U.

You can adjust the visual style as well as each and every element within a level. It seemed easy enough to use in the demo and Nintendo seems to be serious in its attempt to foster creativity amongst players what with letting you upload your own levels only if you're able to complete them. Super Mario Maker is out on September 11 this year and we can't wait to check it out.

2. Star Fox Zero is being co-developed by PlatinumGames

The latest entry in Nintendo's space shooter series featuring anthropomorphic animals, Star Fox was finally revealed. Called Star Fox Zero, it's being co-developed by PlatinumGames, the studio behind cult classics like Vanquish and Bayonetta. Star Fox Zero will sport both single and multiplayer modes and feature heavy use of the Wii U gamepad, giving you a cockpit view of the action, while your TV will showcase the game from the third person camera we're familiar with.

Also of interest is that the ships you fly can transform into tanks. It's the first new entry in the series in over nine years and looks to be one of the more solid titles in Nintendo's roster. Look out for this in the holiday season of 2015.

3. Xenoblade Chronicles X finally has a release date

Helmed by the team responsible for Xenoblade Chronicles on the Wii and 3DS, X seems to be the reason for many to get a Wii U. Nintendo showed off a fantastic trailer replete with giant robots duking it out, varied flora and fauna, as well as a host of different environments. But most of all, the game finally has a release date. You can get your hands on this much anticipated Japanese role-playing game on December 12 this year.

4. Legend of Zelda is still coming, just not on the Wii U

With the long awaited Wii U entry to the Legend of Zelda series missing, fans had to make do with The Legend of Zelda: Triforce Heroes - a co-operative action adventure for up to three players on the 3DS. It's out in Fall 2015. In addition to this, series spin-off Hyrule Warriors sees a release on Nintendo's portable console as Hyrule Warriors Legends in Q1 2016.

5. Animal Crossing should keep fans of The Sims occupied

Nintendo's quirky take on the simulation genre, Animal Crossing (think The Sims but with design sensibilities that are quintessentially Nintendo) saw some love too. The company announced Animal Crossing: Happy Home Designer for the 3DS. It's out on September 25 in the US and October 2 in Europe. Also announced was Animal Crossing: Amiibo Festival, a new title coming to Wii U in Holiday 2015.

6. 2016 has a lot of 3DS games and one Wii U game - for now

Mario & Luigi: Paper Jam, a new entry in the Paper Mario series, will see a Spring 2016 release. Also coming in 2016 is a new Metroid game that seems to feature co-op game modes. It is called Metroid Prime Federation Force. The next entry in the company's Fire Emblem series, Fire Emblem: Fates, which will also hit the West in 2016. All of these are for the 3DS.

For now, a single Wii U game has been announced for 2016, and that's the much vaunted cross-over title, Shin Megami Tensei x Fire Emblem that has characters from both series sharing the stage in an RPG extravaganza.

7. Dinosaurs and tennis round off Nintendo's Wii U announcements

Perhaps the most charming game of the event was Yoshi's Woolly World. It has you controlling Yoshi, a green dinosaur made of wool across a host of environments knitted together from yarn. In addition to its unique looks it also has a release date; this adorable platformer hits the Wii U on October 16.

Also out this holiday season on the Wii U is Mario Tennis: Ultra Smash, which as the name implies, has characters from the Mario universe battling it out on the tennis courts.

8. Skylanders and Amiibos now have a common game in Skylanders Superchargers

Further fuelling the craze of merging toys and video games, Nintendo announced that Skylanders Super Chargers, a role-playing platform game published by Activision for the Wii U, will support both the series' Skylander toy figures as well as specific Amiibo hybrid figures. Turbo Charged Donkey Kong and Hammer Slam Bowser will be the first figures that can be used in both Skylanders and Amiibo-supported games.