Goldman Downgrades Microsoft, Cites "Change In Course" Needed, Lowers Price Target From $32 To $28
Monday is not shaping up to be a pretty day for owners of the company that was once the modern-day equivalent of Apple, Amazon and Netflix. Oddly enough, that leveraged dividend appears not to be doing it for the "value" investors. Stock is red after Goldman, of all banks, decides to tell the truth: "We are downgrading Microsoft to Neutral and lowering our EPS estimates by 4%, 3% and 4% in FY2011, FY2012 and FY2013, and therefore our price target to $28 from $32, which suggests more upside in other Buy-rated names in our coverage. We believe the intrinsic value of shares cannot be unlocked if the status quo remains, and we have increased caution near term on a more elongated PC refresh cycle, combined with the newer threat of notebook cannibalization from tablets, where Windows does not yet have a presence." Here Goldman appears to have grown a little sense of humor: "Since added to the Americas Buy list on 8/12/08, MSFT shares have returned -13%, compared to -11% for the S&P 500."