Bank of America Downgrades Microsoft (MSFT)

Bank of America Downgrades Microsoft (MSFT)


Bank of America reported on Thursday that it has downgraded software company, Microsoft Corporation (MSFT).

The firm has lowered its rating on MSFT from a “Buy” to “Neutral,” and has reduced the company’s price target from $35 to $33. This price target suggests a 14% increase from the stock’s current price of $28.36.

An analyst from the firm commented, “our Buy thesis was predicated on an aggressive $40bn share buyback program and the Win 7 product cycle. We were hoping that MSFT would make a bold foray with Win 8 into smartphones and tablets. Conventional product cycle wisdom dictates that the stock should peak before a Win launch (it hit $31.45 in Sept ’12 before Win 8), but we remained optimistic because the limited availability of touch-based devices impaired an objective assessment of Win 8. Now, six months post launch, despite more available touch-based devices, Win 8 lacks momentum, challenging our optimism.”

Microsoft shares were down 15 cents, or -0.53% during premarket trading Thursday. The stock has declined -11% in the past year.

The Bottom Line
Shares of Microsoft Corporation (MSFT) have a 3.22% yield, based on Wednesday’s closing price of $28.56.

Microsoft Corporation (MSFT) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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