Microsoft Corporation(NASDAQ:MSFT) released its report on the largest single day decrease in dollars in its entire fifteen years on Tuesday. As a result, investors have responded to the company’s lackluster performance and a failure in OS Windows, which proved accurate for many analysts’ predictions.
The rate at which the shares of the company closed were down 9.2% (US$4.35 – US$42.66), which had been termed as the company’s largest drop on the dollar since 2000. In addition, since July 2013, the stock percentage drop has been to a greater extent; where it showed the worst performance of the S&P 500.
The stock of Microsoft was lowered to neutral, whereas the price target got sliced at J.P Morgan, MKM Partners and Nomura on the follow up of poorer than expected sales growth of Windows. Microsoft blamed US dollar’s weakness for the forecast of this fiscal year, where Wall Street expectations shattered.
According to Rick Sherlund, who is a Nomura analysts, his price target has been decreased on the stock from US$56 to US$50.
“Underlying trends in Windows and Office suggest a more challenging transition ahead”
According to MKM Partners, the company is facing constant cost tightening because of lower revenue. J.P Morgan’s analysts have cut their fiscal/share earnings for this year by a prediction of 8% and shared their concerns for “sustainably toward US$50”.
On citing the fiscal year appearance, Sterne Agee decreased its price target from US$46 to US$44. To him, there was an expected reduction in the earnings of the stock; not a good news for investors.
Another analyst at Raymond James cited that there is positivity in the movement of Microsoft enterprises within the cloud.