Erste Group Bank Increases Earnings Estimates for Microsoft

Key Points

• Erste Group Bank raised its FY2027 EPS estimate for Microsoft to $19.40 from $19.32, slightly increasing its outlook above the broader consensus of $16.76 per share.
• Microsoft’s most recent quarterly results beat expectations, with EPS of $4.27 versus $4.06 expected and revenue of $82.89 billion, up 18.3% year over year.
• Analyst sentiment remains broadly positive, with 39 Buy ratings and a consensus price target of $560.88, even as Microsoft trades around $409.43 and continues paying a quarterly dividend.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Analysts at Erste Group Bank lifted their FY2027 EPS estimates for Microsoft in a note issued to investors on Tuesday, May 12th. Erste Group Bank analyst H. Engel now anticipates that the software giant will earn $19.40 per share for the year, up from their prior estimate of $19.32. The consensus estimate for Microsoft's current full-year earnings is $16.76 per share.

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

Several other equities analysts have also commented on the company. Bank of America initiated coverage on Microsoft in a research note on Tuesday, March 24th. They issued a "buy" rating and a $500.00 price target on the stock. Wells Fargo & Company increased their price objective on shares of Microsoft from $615.00 to $625.00 and gave the stock an "overweight" rating in a research report on Thursday, April 30th. Piper Sandler lifted their target price on shares of Microsoft from $500.00 to $540.00 and gave the company an "overweight" rating in a report on Thursday, April 30th. New Street Research decreased their price target on Microsoft from $675.00 to $600.00 and set a "buy" rating on the stock in a research note on Thursday, April 30th. Finally, Truist Financial lowered their price target on Microsoft from $675.00 to $575.00 and set a "buy" rating for the company in a research report on Thursday, April 30th. Thirty-nine investment analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the stock. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus price target of $560.88.

Microsoft Trading Up 1.0%

Shares of Microsoft stock opened at $409.43 on Friday. The stock has a 50 day moving average of $397.84 and a 200 day moving average of $441.52. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The firm has a market capitalization of $3.04 trillion, a price-to-earnings ratio of 24.37, a PEG ratio of 1.46 and a beta of 1.10. Microsoft has a fifty-two week low of $356.28 and a fifty-two week high of $555.45.

Microsoft Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be issued a dividend of $0.91 per share. The ex-dividend date is Thursday, May 21st. This represents a $3.64 annualized dividend and a yield of 0.9%. Microsoft's dividend payout ratio is 21.67%.

Insider Activity

In related news, Director John W. Stanton purchased 5,000 shares of Microsoft stock in a transaction on Wednesday, February 18th. The shares were bought at an average price of $397.35 per share, with a total value of $1,986,750.00. Following the transaction, the director directly owned 83,905 shares of the company's stock, valued at approximately $33,339,651.75. This trade represents a 6.34% increase in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business's stock in a transaction dated 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 of the company's stock, valued at approximately $56,486,322.16. This represents 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.

Institutional Investors Weigh In On Microsoft

A number of large investors have recently modified their holdings of MSFT. WFA Asset Management Corp raised its holdings in Microsoft by 27.0% during the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock worth $427,000 after purchasing an additional 216 shares in the last quarter. Ironwood Wealth Management LLC. raised its stake in Microsoft by 0.3% during the 2nd quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock worth $5,658,000 after acquiring an additional 38 shares in the last quarter. Discipline Wealth Solutions LLC raised its stake in Microsoft by 410.4% during the 3rd quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock worth $1,144,000 after acquiring an additional 2,138 shares in the last quarter. Wealth Group Ltd. lifted its position in Microsoft by 1.2% in the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant's stock valued at $1,000,000 after acquiring an additional 28 shares during the last quarter. Finally, Eagle Capital Management LLC boosted its stake in Microsoft by 0.4% in the fourth quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant's stock valued at $9,735,000 after acquiring an additional 96 shares in the last quarter. 71.13% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Bill Ackman said Pershing Square took a new stake in Microsoft, calling the stock’s valuation compelling and signaling strong institutional confidence. Reuters: Ackman's Pershing Square takes stake in Microsoft, citing 'compelling' valuation
• Positive Sentiment: Wedbush reiterated an Outperform rating and raised its price target to $575, citing Microsoft’s OpenAI deal restructure and continued Azure growth potential. Blockonomi: Microsoft (MSFT) Stock Surges to $575 Target...
• Positive Sentiment: Analyst coverage remained bullish, with TD Cowen and Phillip Securities reaffirming positive ratings on MSFT amid AI and cloud momentum. TipRanks: Microsoft Buy Rating Reiterated...
• Positive Sentiment: Commentary around Microsoft’s OpenAI agreement suggested the revised revenue-sharing terms could strengthen Microsoft’s long-term AI economics and speed up cash generation. Yahoo Finance: OpenAI's IPO Dream Gets Massive Boost...
• Neutral Sentiment: Microsoft also announced a board addition, naming former EY chairman and CEO Carmine Di Sibio to its board of directors. PR Newswire: Microsoft announces appointment...
• Negative Sentiment: Microsoft’s UK business software operations face a new antitrust probe, adding regulatory uncertainty around its dominance in productivity and cloud software. Reuters: UK opens antitrust probe into Microsoft's business software
• Negative Sentiment: LinkedIn announced layoffs of about 5% of staff, reinforcing that Microsoft is still trimming costs and rebalancing spending while investing heavily in AI infrastructure. Reuters: Microsoft eyeing startup deals for life after OpenAI

Microsoft Company Profile

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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