It kind of is a simpleton argument for selling. "PC is not selling well so sell MSFT". I would expect a little better analysis from S&P. Nothing about the Enterprise business, nothing about their cloud business both of which are doing very well. People selling MSFT based on PC sales alone are going to be disappointed. It is interesting that they keep a buy rating on INTC. I guess slowing PC sales won't hurt them?! They should have waited till after the earnings report. Now they are going to have egg on their faces.
S&P LOWERS OPINION ON SHARES OF MICROSOFT (MSFT 36 **) TO SELL FROM HOLD: We lower our 12-month target price by $6, to $30, based on a discounted peer group P/E multiple. We believe a discount is warranted due to the continued decline in personal computer unit sales and MSFT's just announced restructuring. We think the restructuring to focus on devices and services is overdue and where the computing market is today, and therefore view it as a needed move by MSFT. Our concern, however, is that it will take time for the restructuring to take hold and bear fruit. So while needed, we see the realignment adding execution risk to revenues and earnings./B. Coffey