Technology Research Group: More Downside Risk Than Upside Potential In Microsoft

Analysts at Technology Research Group reiterate their "sell" rating on Microsoft

. The target price for MSFT is set to $24. MSFT has reported better-than-expected F3Q earnings and revenue results. “Top and bottom-line growth looked good on the surface (6% and 36% respectively). A lack of P&L quality tempers enthusiasm. Deferred revenue drawdown (down 14% YTD) limits the validity of sales gains. Contributions from a variety of non-operational sources call earnings quality into question,” the analysts say. MSFT’s shares have gained 2% year-to-date. “Valuation may look cheap, but we see far more downside risk than upside potential. We believe Microsoft has ample room for a correction over the next one to two months and negligible appreciation potential over the long-term,” Technology Research Group adds.