Barclays cuts Microsoft price target
Barclays Capital cut its price target on Microsoft's stock after the world's largest software company reported a greater-than-expected dip in its quarterly profit.
However, most brokerages maintained their ratings and price targets on the stock ahead of next week's Windows 8 launch, described by Credit Agricole Securities as the most comprehensive product refresh cycle in Microsoft's history.
Microsoft reported a 22 per cent drop in profit yesterday due to a fall in sales of computers running the Windows operating system in a weak PC market.
First-quarter sales fell 8 percent to $16.01 billion and some revenue was deferred ahead of upcoming releases of its core Windows and Office products.
Shares of the company, which closed at $29.49 yesterday on the Nasdaq, were set to open 2 per cent lower this morning.
While the weakness in the Windows business was expected, the poor showing by the Office business and the server and tools division was a surprise, Barclays analyst Raimo Lenschow.
Mr Lenschow lowered his price target on the stock to $34 from $36, but maintained his "equal weight" rating.
"We still prefer to wait on the sidelines until after the Windows 8 launch next week," he said in a note.
Microsoft is betting on the release of the touch-friendly Windows 8, which will also run on tablets, to break its heavy reliance on PC sales.