Microsoft (MSFT) Downgraded Amid Valuation Concerns

Microsoft (MSFT) shares are down 0.76% at time of writing to $38.91 after international banking giant Deutsche Bank (DB) downgraded its rating from ‘Buy’ to ‘Hold’ with a price target of $42 per share.

DB cited the closing of the Nokia (NOK) unit acquisition, among other things, as one of the catalysts in the name’s valuation.

[via The Street]”At the time that we assumed coverage of MSFT shares in January 2014, our bullish call was rooted in a number of pending catalysts, including the CEO change, the likelihood of a big Xbox One print, a stabilizing PC market with better-than-expected business PC sales, share gains in enterprise software and our belief that Street sentiment towards the mega-cap incumbents (MSFT& ORCL) was too negative relative to the high-growth disruptors” the broker said in a note to clients this morning.

“Many of these catalysts have now played out, and the nearest-term event (closing of the NOK deal) may be a net negative. We conclude that at 13x our ’15 EPS, the riskreward for the stock is now more skewed to a Hold rating.” the note added.

Shares of M’soft closed at $39.21 on Friday.

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