Goldman Sachs downgraded Microsoft Corp. on Monday to neutral from buy, and lowered its price target on the software giant to $28 from $32.

Among the reasons for the move, the broker cited “increased caution near-term on a more elongated PC refresh cycle” as well as the threat that some of the notebook market could be cannibalized by tablet PCs, where Microsoft Windows doesn’t yet have a presence.

Separately, the broker recommended selling covered calls on Microsoft as a way to increase the yield on a range-bound stock.

Shares in Microsoft dropped 1.6 percent to $23.98 in recent premarket trading.