UPDATE: Morgan Stanley Downgrades Microsoft to Equal-Weight on Windows 8 Weakness

Morgan Stanley downgraded Microsoft Corporation

from Overweight to Equal-weight. Morgan Stanley noted, "MSFT is far too cheap, has multiple non PC drivers and an attractive 3.5% dividend yield. However, Win 8 is disappointing, the PC market will remain weak for awhile and margins are likely capped. As such, the stock is likely range-bound. … PC weakness is not new, and may be in the stock at 8x EPS (implying negative EPS growth in 3 years), but PCs are not likely to improve near term as competitive offerings and the lack of touch devices, Win 8 RT apps and compelling price points are weighing on Win 8. With 60%+ of co.'s now on Win 7, corporate PC growth will also slow, while it may take MSFT longer to penetrate the tablet/ convertible market than first expected." Microsoft closed at $26.70 on Wednesday.