Goldman says 'sell' Microsoft, others downgrade stock

Goldman Sachs recommended selling Microsoft shares, as other analysts downgraded the stock. At least one analyst is more upbeat about Microsoft's chances, though.

The Acer Iconia W510 is now on sale for $399 at the Microsoft Store.  Prices on  Windows 8 devices will need to come down to spur sales, say analysts.
The Acer Iconia W510 is now on sale for $399 at the Microsoft Store. Prices on Windows 8 devices will need to come down to spur sales, say analysts. Acer

Goldman Sachs recommended selling Microsoft today in the wake of brutal first quarter PC shipment numbers.

Heather Bellini, an analyst at Goldman Sachs, recommended that investors sell the stock -- downgrading it from a neutral rating, according to Bloomberg.

"Quarterly results will "gradually deteriorate unless Microsoft successfully repositions itself as a more meaningful participant in the new era of consumer compute," Bellini wrote in a note to investors.

This critique comes after a report from IDC Wednesday showed PC shipments sinking 14 percent worldwide in the first quarter, the worst quarter ever reported by IDC. The market researcher blamed it mostly on the tepid reception by consumers of Windows 8.

Other analysts issued downgrades too, according to Bloomberg. Rick Sherlund, an analyst at Nomura Holdings, and Stephen Turner at Hilliard Lyons downgraded the stock to Neutral from Buy.

But Raymond James' Michael Turits was more sanguine about the stock. He reiterated "outperform" with a price target of $34, according to Barrons.

Turits said Microsoft and Intel are striving to cut costs on touch devices.

Media reports indicate Microsoft and Intel are working to cut the price- gap between touch and non-touch PCs by roughly half ($133-167/unit). We also believe Microsoft is working with supply chain partners to lower touchscreen [Windows 8] components costs for the 2013 back-to-school and holiday seasons. Less expensive touch-screen enabled devices should spur demand for [Windows 8] devices which can take advantage of its touch-centric functionality.

Turits added that corporate enterprise spending should begin to pick up on Microsoft products. "Our checks, however, noted enterprise spend picking up for Office 2013 upgrades, Exchange upgrades, and Office 365," he said.

Microsoft's share price fell 4.44 percent Thursday to 28.94.

HP Envy laptop: consumers are holding on to their PCs longer, IDC said yesterday.
HP Envy laptop: consumers are holding on to their PCs longer, IDC said yesterday.

[Via Neowin ]

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

 

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