Microsoft (MSFT) Reiterated Sell at Goldman, 'The Times They Are a-Changin'

July 19, 2013 9:12 AM EDT
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Goldman Sachs today maintained a Sell rating on Microsoft (NASDAQ: MSFT) and lowered its price target to $28.00 (from $30.00). Shares declined Thursday after Microsoft reported dissappointing Q4 results. In the view of Goldman, more pain is just around the corner.

Commenting, analyst Heather Bellini said, "While enterprise PC demand trends remain relatively stable in their view, Microsoft's take on the OEM market for September calls for another quarter of yoy declines similar to what was experienced in June . . . We continue to believe the mix shift to new form factors with lower Windows price points, coupled with Piracy in emerging markets, will cause Windows revenue to lag behind PC shipment growth. We believe this mix shift will also put pressure on the net ASP for Microsoft, impacting the segment's operating margins. This, coupled with growing capex needs, will also weigh on consensus EPS going forward, in our view."

For FY14, Goldman is now modeling revenue and EPS of $81.8 billion and $2.61 vs $85.1 billion and $2.96 prior.

For an analyst ratings summary and ratings history on Microsoft (NASDAQ: MSFT) click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $35.44 yesterday.

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