Now is the time to sell shares in tech giant Microsoft, according to analysts at Guggenheim. The company downgraded shares to sell from neutral on Tuesday and introduced a price target of $212, implying more than 11% downside potential for Microsoft. Microsoft could disappoint on its upcoming Q2 2023 earnings numbers and full-year guidance as well. “While most investors see MSFT as a large, resilient company that can weather any storm, it has vulnerabilities, some of which could be exacerbated by this macro slowdown,” wrote analyst John DiFucci. Fighting the slowdown may be at hand Microsoft is the Guggenheim’s most exposed market for small and medium-sized businesses, and SMBs typically underperform larger companies during a slowdown, according to DiFucci. “Additionally, Windows accounts for about 12% of sales but more than 20% of the company’s earnings, and while this business has looked like the Energizer Bunny during COVID, it appears to have slowed down significantly recently and is expected to that this continues from industry analysts,” said DiFucci. “CEO Satya Nadella’s comments that ‘the PC has never been more relevant to work, life and play’ at the F3Q22 conference could mark the visionary’s first miscalculation in a long line Another weakness in Windows could impact cash flow numbers, Guggenheim said. The company is also concerned that second-half Azure growth estimates are at risk , where consensus numbers are expecting modest growth after several quarters of decline.”Separately, we’re not the only ones concerned about the near-to-mid-term Au s views of MSFT as CEO Satya Nadella commented that there would be two challenging years for the company after which he expects MSFT to emerge as a stronger entity,” said DiFucci. – CNBC’s Michael Bloom contributed to the coverage.
https://www.cnbc.com/2023/01/17/guggenheim-downgrades-microsoft-says-vulnerabilities-may-be-exacerbated-during-an-economic-slowdown.html Guggenheim downgrades Microsoft, says vulnerabilities could be exacerbated during economic slowdown
