Submitted by: Submitted by tanqingye
Views: 208
Words: 3891
Pages: 16
Category: Business and Industry
Date Submitted: 11/12/2013 04:09 AM
ASIA@THEALPHAGROUP.COM +65-9999-8888
Ticker: MSFT US Equity Company: Microsoft Corporation
ASIA EQUITY RESEARCH GROUP 7 DECEMBER 2012
THE ALPHA GROUP
Price Target: $22.59 Current Price @ 07/12/2012: $26.38 Recommendation: SELL Trading at premium by %: 14%
MICROSOFT CORPORATION IS POSITIONED FOR AN INCREDIBLE FUTURE Company Description Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The company offers operating system software, server application software business and consumer application software, software development tools, and Internet and Intranet software. Microsoft also develops video game consoles and digital music entertainment devices. Product Segmentation
2012 Rev Microsoft Business Server and Tools Windows & Windows Live Entertainment & Devices Online Services 23.99B 18.69B 18.37B 9.59B 2.87B 3Yr Gr 8.26% 9.61% 7.06% 6.09% 10.57%
Price target and valuation analysis Our DCF analysis shows the stock is selling at a premium and relative analysis shows that the stock is selling at a discount. Our overall rating for the stock is SELL. Please refer to “Share Price Performance” section for more explanation on the conlcusion. We expect Microsoft Corporation to achieve a growth rate of 4.72% over the next 5 years, followed by a normal perpetual growth at the rate of 1.13%. Our price target for the stock is $22.59.
Product Segmentation Description ¾ Around 75% of the total windows division revenue comes from OEM. Hence, it is largely correlated to PC market worldwide. Principal products and services: Windows 7 operating system, Windows Live suite of applications and web servers; and PC hardware products, etc. Approximately 55% of Server and Tools division revenue comes primarily from multi-year volume licensing agreements, 25% is purchased through transactional volume licensing programs, retail packaged product and licenses sold to OEMs. Principal Products: Windows Server OS, Windows Azure;...