NEW YORK (TheStreet) -- Shares of Microsoft (MSFT) are sinking, lower by 2.79% to $45.37 on heavy trading volume Tuesday afternoon, following a ratings cut by analysts at Bank of America/Merrill Lynch earlier today to "underperform" from "neutral" with a $47 price target.
Analysts at the firm cited a slowdown in the Win Pro cycle, longer expected time to transition to Consumer Office 365, and difficulties in achieving a margin upside.
BofA/Merrill Lynch analysts added that if Microsoft initiates a $30 billion share repurchase program while reducing operational expenditure by $4 billion, there would be less room left for growth in earnings.
About 33.89 million shares of Microsoft traded hands as of 3:47 p.m. Tuesday, compared to its average trading volume of about 27.84 million shares a day.
Separately, TheStreet Ratings team rates MICROSOFT CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICROSOFT CORP (MSFT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."