Microsoft Corporation (NASDAQ:MSFT) has gotten a lot of flak over the last several years, but analysts at Deutsche Bank think things are looking up for the company. They upgraded it from Hold to Buy and raised their price target from $32 to $40 a share.

Microsoft

Microsoft rules in enterprise

Deutsche Bank analyst Karl Keirstead thinks investors aren’t crediting Microsoft Corporation (NASDAQ:MSFT) enough for its success within the Enterprise sector. He notes that the company’s shares rose about 40% in 2013 even though PC shipments saw some of the worst declines year over year. However, the one area of Microsoft’s business which has remained stable throughout it all is its Enterprise Business.

He said the company is well-positioned within the enterprise market as overall IT spending improves. In addition, he said as spending shifts over to less expensive solutions, he thinks Microsoft is in a good position there as well.

Microsoft to benefit from stabilizing PC market

In fact, the analyst reports seeing some early signs that the PC market is stabilizing. If this is really happening, he said Microsoft Corporation (NASDAQ:MSFT) could see “a material upside” to its growth. He said currently Wall Street’s sentiment about the PC market is about as low as ever, and if it stabilizes, this would certainly be a good thing for Microsoft.

As a result, he said the company’s stock “looks relatively cheap” since it trades lower than the average multiple within the market.

Microsoft still seeks new CEO

Keirstead also pointed to Microsoft Corporation (NASDAQ:MSFT)’s search for a new CEO and says, as other have, that the right person would be able to push for more cost-cutting measures within the company. And the more costs Microsoft is able to cut, the more upside he sees to the business.

Some possible candidates who could take the top spot at Microsoft Corporation (NASDAQ:MSFT) include former Symantec CEO John Thompson, Ericsson AB CEO Hans Vestberg and eBay Inc (NASDAQ:EBAY)’s John Donahoe.