Market Overview

Morgan Stanley Lowers Microsoft's Price Target Amid Weakening PC Sales


Morgan Stanley on Wednesday issued a report on Microsoft Corporation (NASDAQ: MSFT) after estimates of weakening PC data points and the potential for a downturn in commercial growth. Morgan Stanley rates Microsoft as Equal-weight and lowered its price target from $50 to $46.

Analysts Keith Weiss, Melissa Gorham and Josh Baer wrote, "'s become increasingly difficult to put a box around the Windows drag as PC data points deteriorate and the impacts from Windows 10 remain an unknown — specifically relating to potential deferrals and/or changing accounting treatment for Windows OEM revenue...The elevated execution risk around restructuring, new business models and large acquisitions now balances the reward of several potential catalysts."

In the report, analysts note that positive catalysts for Microsoft going forward are, "improving PC unit growth, out-performance in the commercial licensing and devices divisions, increasing exposure of the Cloud businesses, and increasing dividend or share buyback." The upcoming release of Windows 10 gives the company a new stream of revenue growth, while increasing the vertical integration of Microsoft software with OEM hardware is likely the best strategy for success in the smartphone market.

Shares of Microsoft recently traded at $41.75.

Latest Ratings for MSFT

Jan 2021B of A SecuritiesMaintainsBuy
Jan 2021OppenheimerMaintainsOutperform
Jan 2021BarclaysMaintainsOverweight

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