Erste Group Bank Forecasts Microsoft FY2026 Earnings

Key Points

• Erste Group Bank initiated FY2026 EPS coverage for Microsoft at $16.75 per share, essentially in line with the Wall Street consensus estimate of $16.76.
• Microsoft’s most recent quarterly results were better than expected, with EPS of $4.27 versus $4.06 expected and revenue of $82.89 billion topping forecasts, while sales rose 18.3% year over year.
• Analyst sentiment remains broadly positive, with Microsoft holding a “Moderate Buy” consensus and an average price target of $562.69, even as some firms have trimmed targets amid concerns about heavy AI and data-center spending.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Equities researchers at Erste Group Bank issued their FY2026 earnings per share (EPS) estimates for Microsoft in a research note issued to investors on Tuesday, May 5th. Erste Group Bank analyst H. Engel forecasts that the software giant will earn $16.75 per share for the year. The consensus estimate for Microsoft's current full-year earnings is $16.76 per share.

A number of other equities analysts have also recently issued reports on the company. Barclays restated a "buy" rating on shares of Microsoft in a report on Thursday. Robert W. Baird cut their price target on Microsoft from $540.00 to $500.00 and set an "outperform" rating on the stock in a report on Wednesday, April 15th. Raymond James Financial cut Microsoft from a "market perform" rating to a "market perform" rating in a report on Tuesday, May 5th. BMO Capital Markets cut their price target on Microsoft from $575.00 to $505.00 and set an "outperform" rating on the stock in a report on Tuesday, April 28th. Finally, Arete Research increased their price target on Microsoft from $730.00 to $870.00 and gave the stock a "buy" rating in a report on Tuesday, May 5th. One equities research analyst has rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $562.69.

Microsoft Price Performance

Shares of MSFT opened at $415.00 on Monday. The firm has a market cap of $3.08 trillion, a PE ratio of 24.70, a price-to-earnings-growth ratio of 1.50 and a beta of 1.10. Microsoft has a 52-week low of $356.28 and a 52-week high of $555.45. The business's 50 day moving average price is $396.79 and its two-hundred day moving average price is $445.39. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, beating the consensus estimate of $4.06 by $0.21. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The business had revenue of $82.89 billion for the quarter, compared to analysts' expectations of $81.44 billion. During the same period in the prior year, the business posted $3.46 earnings per share. The firm's revenue was up 18.3% on a year-over-year basis.

Microsoft Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft's dividend payout ratio is presently 21.67%.

Insider Buying and Selling

In other news, Director John W. Stanton bought 5,000 shares of the stock in a transaction dated Wednesday, February 18th. The shares were bought at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the transaction, the director directly owned 83,905 shares of the company's stock, valued at $33,339,651.75. This trade represents a 6.34% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, EVP Kathleen T. Hogan sold 12,321 shares of the company's stock in a transaction that occurred on Friday, March 6th. The stock was sold at an average price of $409.52, for a total value of $5,045,695.92. Following the transaction, the executive vice president directly owned 137,933 shares in the company, valued at $56,486,322.16. The trade was a 8.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.03% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

A number of institutional investors have recently modified their holdings of MSFT. Longfellow Investment Management Co. LLC raised its position in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after buying an additional 20 shares during the last quarter. Bernzott Capital Advisors purchased a new stake in Microsoft in the 4th quarter valued at $34,000. Timmons Wealth Management LLC purchased a new stake in Microsoft in the 4th quarter valued at $36,000. Bayforest Capital Ltd purchased a new stake in Microsoft in the 3rd quarter valued at $38,000. Finally, Fairway Wealth LLC raised its position in Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant's stock valued at $43,000 after buying an additional 66 shares during the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft continues to draw bullish analyst commentary, with multiple firms raising or reaffirming price targets after the company’s strong earnings beat and Azure growth, reinforcing the view that core business momentum remains solid.
• Positive Sentiment: New reports suggest Microsoft’s AI ecosystem is still gaining traction, including partner milestones tied to Copilot and AI cloud services, which supports the case for continued enterprise adoption.
• Positive Sentiment: Several hedge funds and asset managers have recently added to Microsoft positions, indicating that some large investors still view MSFT as a long-term AI and cloud leader.
• Neutral Sentiment: Microsoft partnered with CAISI and AISI to advance AI model testing standards, a policy-and-safety focused update that may help its enterprise credibility but is unlikely to move the stock on its own.
• Neutral Sentiment: Reports that Microsoft is considering adjustments to its renewable-energy targets and offering voluntary retirement packages reflect ongoing cost and infrastructure pressures, but these items are more strategic than immediately material to revenue.
• Negative Sentiment: Market attention is centered on TCI’s reduced stake and the broader “AI anxiety” trade, with investors worried Microsoft may be spending heavily on AI infrastructure before the payoff becomes clearer.
• Negative Sentiment: Some commentary also points to temporary margin pressure from elevated AI and data-center spending, which could weigh on near-term profitability even as growth remains strong.

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft's product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).

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