Citi Positive On Windows 8

Citi Investment Research is out with a research report on Microsoft MSFT as the company previewed its new operating system, Windows 8. It has a Buy rating and a $35 price target on shares. In a note to clients, Citi writes, "While demos are controlled and the general public has not gotten its hands on the product, there were several features that caught our eye. The user interface (UI) is crisp and clean (“tiles” as expected) and multi-tasking (“snap” feature) is much easier than on current tablets. The developer model for lightweight tablet apps is based on HTML5 and Javascript, which open up development of apps to the broadest audience possible. A new version of Internet Explorer (IE 10) was shown that is touch optimized. It was hinted that boot times will be significantly reduced, but no details were provided. As expected, Windows 8 will have an app store. We expect further details to dribble out between now and the Sept 13-16th developer event (dubbed “Build”)." Citi goes on to say, "The overwhelming investor sentiment is that Windows 8 won't improve Microsoft's position in the consumer device market. While Wednesday's events won't fully reverse investors' mindset, we have greater confidence after seeing everything that the product is a strong entry in the market and believe the risk-reward around Microsoft's ability to execute in tablets has turned positive. We now prefer Microsoft to Oracle in mega-cap software, with a positive risk-reward related around upcoming “Windows 8” events contributing to our view." Shares of MSFT lost 58 cents yesterday to close at $24.43, a loss of 2.3%.