Is Microsoft Worth $39 Per Share? (MSFT)

The motive here is Windows 8 launching this year as the operation system that can compete in both the PC and in the tablet markets.  The stock only trades at about 12-times Argus’ current year earnings and less than 11-times next year’s earnings estimates.  The report noted, “We view Microsoft shares as undervalued by historical standards and relative to peers.”

With shares at $32.85, the 52-week trading range is $23.65 to $32.94.  Analysts have been raising the target price on Microsoft and Thomson Reuters now has a consensus price target objective of $33.00 per share.  This $39.00 is at the top of the range of estimates, and the highest target noted by Thomson Reuters is $40.00 on the stock.  Because the share performance has been so strong, Microsoft now yields only 2.4% on its dividend.

If Argus is right on its price target, then there is just over 20% upside left in Microsoft shares if you include its dividend.

JON C. OGG