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BMO raises Microsoft stock target on gaming growth potential

EditorAhmed Abdulazez Abdulkadir
Published 12/04/2024, 11:24
© Reuters.

On Friday, BMO Capital Markets adjusted its outlook on Microsoft Corporation (NASDAQ:MSFT), raising the price target to $465 from the previous $455, while reiterating an Outperform rating on the tech giant's shares. The firm's analyst highlighted Microsoft's promising future in the gaming sector, citing the company's strong position in the market, which is bolstered by its leading content and scale.

The analyst noted that while the gaming industry can experience fluctuations, Microsoft is expected to outperform the overall gaming market growth rates. This optimism is based on Microsoft's ability to leverage its competitive advantages in gaming, which are expected to support revenue growth in this segment.

Microsoft's gaming division has been identified as a key driver for the company's sustained growth. The analyst's confidence in Microsoft's gaming prospects is reflected in the increased price target, signaling a belief in the company's long-term growth trajectory within the competitive landscape of the gaming market.

The updated price target of $465 suggests that BMO Capital Markets sees a larger upside for Microsoft's stock, underpinned by the anticipated success of its gaming initiatives. The firm's analysis indicates that Microsoft's gaming opportunities could significantly contribute to the company's overall performance in the coming years.

InvestingPro Insights

As Microsoft (NASDAQ:MSFT) continues to make waves in the gaming industry, a look at the company's financial metrics and strategic positioning through InvestingPro provides a clearer picture of its market standing. With a robust market capitalization of $3.18 trillion and a solid revenue growth of 11.51% over the last twelve months as of Q2 2024, Microsoft's financial health appears strong.

An InvestingPro Tip points out that Microsoft has raised its dividend for 18 consecutive years, showcasing a commitment to returning value to shareholders. This is complemented by a dividend yield of 0.71% and a notable dividend growth of 10.29% over the last twelve months as of Q2 2024, reflecting the company's stable cash flows and financial prudence.

Additionally, Microsoft's P/E ratio stands at 38.64, which suggests that the stock is trading at a high earnings multiple. This could be indicative of investor confidence in the company's future earnings potential, particularly in high-growth sectors like gaming, as highlighted by BMO Capital Markets. For investors seeking comprehensive analysis and additional insights, InvestingPro offers more tips on Microsoft's financial metrics and strategic moves. There are 18 more InvestingPro Tips available for Microsoft, which can be accessed through a subscription. To get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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