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Top Analyst Preview: Microsoft

Microsoft stock has hardly moved in months. Will it finally pop after earnings, Thursday?

As you may know, the traders have been mostly bullish on Microsoft over the past several months, partly because of its strong balance sheet.

With the firm due to release Q2 earnings on Thursday after the bell, what can you expect?


As you can see from the chart, the stock has been stuck in a range since November.

How should you trade?

UBS analyst Heather Bellini tells us she thinks Microsoft is a trading buy ahead of earnings. “It’s a better house in a bad neighborhood” she says, “but I do think you could get some alpha if you’re long it for the print.”

For those of you looking for a longer-term trade, you might like knowing Bellini has a buy on the stock with a 12-month price target of $30.

And in case you’re wondering, Bellini thinks ultimately they need to do a deal with Yahoo! “and I do think it will happen eventually,” she says.

However, it's worth noting that opinions on Microsoft vary widely. Some analysts say Microsoft's clients have cut back on IT spending due to the weak economy and as a result the software giant will probably fall short of its revenue and EPS targets.

On average, analysts surveyed by Thomson Reuters are looking for profit of 49 cents per share on revenue of $17.08 billion.

What do you think? Tell us now!




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Trader disclosure: On Jan. 21th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MCD), (BAC), (C), (TM), (MSFT); Seymour Owns (AAPL), (BAC), (F), (EEM), (FXI), (TSO); Finerman's Firm Owns (DNA), (AEO), (MSFT), (PM); Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (USO); Najarian Owns (EEM) Call Spread; Najarian Owns (FCX) & (FCX) Short Calls; Najarian Owns (MS) Stock; Najarian Owns (MS) Short Calls & Short Put Spread; Najarian Owns (NVLS) Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (XME) Long Calls; Najarian Owns (APPL) Call Spread; Najarian is Long (PALM) Call Spread; Najarian Owns (GGB) Long Calls

Disclosures For Heather Bellini:
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: Microsoft Corp.

This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.:Microsoft Corp.

This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.:Microsoft Corp.