Citi Maintains Buy on Microsoft

Citi is out with its report today on Microsoft MSFT, maintaining Buy. In a note to clients, Citi writes, "We rate shares of Microsoft Buy/Low Risk (1L). Our rating is based the belief investors have significant underestimated the company's ability to maintain / grow its revenue in core franchises of Windows, Server and Tools and Business Division. The introduction of tablet form factors has caused investors to question the future of Windows and have effectively priced this franchise for future decline. Meanwhile, the enterprise businesses (S&T and MBD) are likely to grow at or above the rate of the software industry (5-10%) long-term. This is likely to drive mid-single digit revenue growth and 10% EPS growth in the core businesses." Shares of MSFT closed Friday at $26.78.