Erste Group Bank Boosts Earnings Estimates for Microsoft

Key Points

• Erste Group Bank raised Microsoft’s FY2027 EPS estimate to $19.58 from $19.54 and projected FY2028 EPS of $23.38, broadly aligning with the current FY2027 consensus of $19.59.
• Microsoft’s latest quarterly results exceeded expectations, with EPS of $4.74 versus $4.24 expected and revenue of $90.01 billion versus $87.62 billion; revenue increased 17.7% year over year.
• Analyst sentiment remains positive, with 42 Buy ratings and five Holds producing a “Moderate Buy” consensus and an average price target of $560.27, while the company declared a quarterly dividend of $0.91 per share.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Investment analysts at Erste Group Bank upped their FY2027 earnings per share (EPS) estimates for shares of Microsoft in a report released on Thursday, August 27th. Erste Group Bank analyst H. Engel now forecasts that the software giant will post earnings of $19.58 per share for the year, up from their prior forecast of $19.54. The consensus estimate for Microsoft's current full-year earnings is $19.59 per share. Erste Group Bank also issued estimates for Microsoft's FY2028 earnings at $23.38 EPS.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.24 by $0.50. The business had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business's revenue was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the company earned $3.65 EPS.

Other research analysts also recently issued research reports about the stock. CLSA reissued an "outperform" rating on shares of Microsoft in a research report on Thursday, July 30th. Weiss Ratings raised shares of Microsoft from a "hold (c)" rating to a "hold (c+)" rating in a research report on Thursday. UBS Group set a $525.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. Citigroup reissued a "buy" rating and set a $600.00 price objective (up from $570.00) on shares of Microsoft in a report on Tuesday, July 28th. Finally, Raymond James Financial downgraded shares of Microsoft from a "market perform" rating to a "market perform" rating in a research note on Tuesday, May 5th. Forty-two research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat.com, Microsoft has a consensus rating of "Moderate Buy" and an average price target of $560.27.

Microsoft Stock Performance

MSFT stock opened at $513.53 on Monday. Microsoft has a 1-year low of $349.20 and a 1-year high of $553.72. The business has a 50-day moving average price of $430.87 and a 200 day moving average price of $412.43. The company has a market capitalization of $3.81 trillion, a P/E ratio of 28.59, a PEG ratio of 1.65 and a beta of 1.10. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22.

Hedge Funds Weigh In On Microsoft

Large investors have recently made changes to their positions in the business. Montgomery Financial Services LLC acquired a new position in Microsoft during the 2nd quarter valued at approximately $26,000. Longfellow Investment Management Co. LLC lifted its stake in shares of Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after buying an additional 20 shares during the period. Bernzott Capital Advisors acquired a new stake in shares of Microsoft during the fourth quarter worth $34,000. Frankly Finances LLC purchased a new stake in shares of Microsoft during the second quarter valued at $35,000. Finally, Timmons Wealth Management LLC purchased a new stake in shares of Microsoft during the fourth quarter valued at $36,000. 71.13% of the stock is owned by institutional investors and hedge funds.

Insider Buying and Selling

In related news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the completion of the sale, the chief executive officer owned 100,447 shares of the company's stock, valued at $49,007,086.83. This represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, EVP Takeshi Numoto sold 4,810 shares of the firm's stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares of the company's stock, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 21,810 shares of company stock worth $10,110,874. Insiders own 0.03% of the company's stock.

Microsoft Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft's dividend payout ratio (DPR) is currently 20.27%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s strong Azure and cloud performance helped drive a rally of roughly 48% from its June low, with the stock reaching a 10-month high and moving above a technical buy point. A recently formed “golden cross,” in which the 50-day moving average moved above the 200-day average, also supports bullish momentum. Bull v. Bear: MSFT Hits 2026 High, is a New Record Next?
• Positive Sentiment: Microsoft is reportedly in early discussions with Moonshot AI regarding its Kimi K3 model. A potential arrangement could add another AI service to Azure and create a new revenue stream, although negotiations are not finalized. MSFT Stock Alert: Moonshot Could Give Microsoft Another AI Revenue Stream
• Positive Sentiment: Microsoft’s deployment of more than 25 AI agents across its supply chain illustrates early enterprise use cases for agentic AI, including demand forecasting, freight routing and inventory management. Successful internal deployments could support broader adoption of Microsoft’s AI tools. Microsoft Puts 25 AI Agents to Work on Supply Chain Costs
• Positive Sentiment: Microsoft is spending heavily on AI infrastructure—approximately $175 billion this year—and has reassured employees that data-center investment is intended to support long-term growth. Azure reportedly surpassed $100 billion, while contracted backlog and commercial bookings remain major valuation supports. Microsoft Reassures Employees About AI Data Center Impacts
• Neutral Sentiment: Microsoft’s gains have helped lift major indexes, but the strength is concentrated in a few mega-cap technology stocks while small caps and many sectors weaken as bond yields rise. This creates a broader market-risk backdrop despite Microsoft’s relative strength. Dow Jones Futures: Microsoft, Titans Mask Market Weakness
• Negative Sentiment: One analyst argued that Microsoft’s valuation rerating may be largely complete for now, raising the risk of profit-taking after the recent monthly rally. At the current valuation, further gains may require continued upward revisions to cloud and AI growth expectations. Microsoft: The Rerating Is Probably Over For Now

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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