Why UBS Reduced Its PT On Microsoft, Even Though It Believes In 'What They Are Doing Behind The Scenes'

Analysts at UBS reduced their price target on Microsoft Corporation MSFT to $49 from $52 on Monday. Brent Thill, UBS managing director and senior analyst, was on CNBC recently to explain the reasons behind this move. Doing The Right Thing "Nadella is inheriting the company in a position that I don't think he wanted to inherit it in," Thill said. "So, you are going to have to go from a living in Hawaii to going to Alaska. It's tough right now and now he is in the execution face and so the grade I'd give him, I'll rate him very high and here is the reason why -Everyone in the Silicon Valley says he is doing the right thing." "The CEO of [Adidas], Dropbox, you go through the list. I mean, this is small, start-ups and large are all seeing that behind the scenes he is really doing the right thing. I had a 20 year veteran who founded a very large online travel company, who I will not name, but he said, ‘look, it's cool to work at Microsoft again'. He lives in Seattle, he sees what's happening" Getting To The Other Side He continued, "So, I believe in what they are doing behind the scenes, what I may be wrong on is how long it may take Microsoft to get to the other side and so that's why we took the number cut we did today." Big Multiples Thill also remarked on the valuations of tech companies, saying, "We are still concerned that there are a lot of companies inside the software universe and broader tech that have pretty big multiples."