Microsoft Stock Downgraded

News Article - Monday, 15 April 2013 13:05

By: Kerry Butters Category: Networking

Analysts have downgraded Microsoft stock from buy to neutral in the wake of reports from IDC and Gartner that contributed the sharp decline in PC sales to Windows 8.

The decline was worse than forecast and the steepest decline since IDC began worldwide PC tracking in 1994. IDC put much of the blame for this on Windows 8, which has failed to make any real impact on consumers along with Surface.

"The combination of Windows 8's sluggish adoption and the absence of compelling new hardware have been disappointing,with no relief likely until later this year when Intel’s Haswell new notebook processor extends Ultrabook battery life to 10 hours and prices fall to an expected $600 level,” said ‘veteran Microsoft analyst’ Rick Shurland.

The analyst isn’t alone in condemning Windows 8 however and Goldman Sachs analyst, Heather Bellini, has taken it a step further and recommended that investors sell any shares they hold in the company.

Shares in Microsoft fell 4.4% last week, the biggest drop since 2011 and according to Shurland, Office will no longer do well amongst consumers either, although it’s likely that business users will continue to use it.

Consumers are also "unlikely to remain with Microsoft for notebooks or tablets, while the other half likely work in an office setting and continue to produce higher-value content in Office and could be receptive to a new generation of thin, light weight, touch-based notebooks offering instant on, 10 hours of battery life and at a price approaching $600 by year- end,” Shurland added.

According to Bloomberg News, at least one other analyst, Steven Turner, has also downgraded the stock from buy to neutral.

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