Microsoft Corporation (NASDAQ: MSFT) stock corrected over 0.09% this morning (as of 10:29AM EDT on October 6th, 2017; Source: Google finance) after a positive trading session yesterday post analysts from Canaccord Genuity bullish view.
The believe that the group would benefit from the fast-growing world of eSports, as it prepares to launch its latest video game system and the company could get a boost from its latest Xbox launch. That’s according to analysts at Canaccord Genuity, which this week has boosted its rating and price target for the software giant. Davis also boosted his price target for MSFT from $76 to $86, which suggests a further 13% upside from current levels.
Canaccord Genuity has upgraded MSFT shares to buy from hold, due to the fact that the Xbox maker could give more credibility to the budding world of esports, which is centered on video game tournaments and already attracts thousands of participants and viewers. According to the analyst, Canaccord Genuity consider this is both an area of future internal development and prospective M&A. With regard to M&A, perhaps Microsoft could become the Ticketmaster of eSports, maybe they could run leagues. Canaccord says that despite Microsoft’s strong share performance this year, investors are still not giving Microsoft enough credit for the “virtuous cycles” it has created in its four “compelling” growth drivers.
Moreover, the company will release the Xbox One X next month. The revamped system, which Microsoft is called “the world’s most powerful console,” will feature 4K resolution with HDR support and other advanced technology for next-generation games.
Additionally, Esports are turning a lot of heads lately. The industry revenue is expected to hit $1.1 billion in 2019, and roughly 76 percent of esports fans claim the virtual tournaments are overtaking their time spent watching traditional sporting events, according to research firm Newzoo. New England Patriots owner Robert Kraft has recently made headlines by purchasing one of seven teams for the Overwatch League, a popular online game produced by Activision Blizzard. Further, as per Newzoo’s analysts, for brands, media, and entertainment companies, esports provides a chance to capitalize on the favorite pastime of digital natives and Millennials: playing games and watching game content.
Furthermore, another growth driver spied by Canaccord is “Office Productivity,” the easiest of Microsoft’s big business divisions to identify, because it gives its name to the company’s productivity and business processes division. Both of the last two businesses that Canaccord Genuity highlights as growth drivers for Microsoft are housed in the same division. “More Personal Computing” includes both the Canaccord-favored gaming (Xbox) and marketing (MSN and Bing ads) businesses, and individually licensed Windows software, Windows Phone, and Surface PCs besides.
MSFT stock has risen 31.89% in a year (source: Google Finance).