UBS downgraded Microsoft Corporation (NASDAQ:MSFT) to Neutral from Buy and cut its price target to $250 from $300. As a result, shares dropped more than 4% yesterday.

The analysts cited weaker-than-expected field checks on cloud providers and concerns that Office seat growth may moderate in 2023. In addition to these concerns, the analysts noted that Microsoft's multiple "already feels fair, not cheap."

The analysts also highlighted potential deceleration in the growth of Microsoft's Azure division, slower growth in Office 365 revenues, and margin pressures as potential challenges for the company.

The analysts lowered their fiscal 2024 revenue estimates to $243.2 billion while raising their EPS estimate to $11.27, slightly above current Street estimates.