UBS analyst Karl Keirstead put Microsoft’s (MSFT. US) downgraded its rating to “Neutral” from “Buy” while lowering its price target to $250 from $300. The analyst cited a round of field surveys of cloud service providers, including Azure Cloud Platform, and argued that growth in the size of the office market could slow in 2023 and that stock price-to-earnings ratios are already in a reasonable range rather than “cheaper.”
UBS analysts told investors in a research note that the Azure cloud platform is likely to see a “sharp slowdown in business growth” in 2023, which the analyst said could be worse than expected due to its higher maturity rather than just a tough macro backdrop. In addition, the analyst added that Microsoft’s Office 365 subscription service is vulnerable to a macroeconomic slowdown in 2023. In addition, he believes Microsoft’s stock price already reflects its “defensive premium.”