Erste Group Bank Decreases Earnings Estimates for Microsoft

Key Points

• Erste Group Bank slightly lowered Microsoft’s FY2027 EPS forecast to $19.57 from $19.60, below the $19.66 consensus estimate, while projecting FY2028 EPS of $23.53.
• Despite the modest estimate cut, analyst sentiment remains positive: Microsoft has a “Moderate Buy” consensus rating from MarketBeat, with 43 Buy, four Hold and two Sell ratings and a consensus price target of $592.15.
• Microsoft recently exceeded quarterly expectations, reporting $4.74 EPS and $90.01 billion in revenue, while raising its quarterly dividend to $0.98 per share from $0.91.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Analysts at Erste Group Bank decreased their FY2027 earnings per share estimates for shares of Microsoft in a research report issued on Wednesday, October 21st. Erste Group Bank analyst H. Engel now anticipates that the software giant will post earnings per share of $19.57 for the year, down from their previous forecast of $19.60. The consensus estimate for Microsoft's current full-year earnings is $19.66 per share. Erste Group Bank also issued estimates for Microsoft's FY2028 earnings at $23.53 EPS.

Several other research firms also recently weighed in on MSFT. Weiss Ratings raised shares of Microsoft from a "hold (c+)" rating to a "buy (b-)" rating in a report on Thursday, October 8th. Evercore upgraded shares of Microsoft from an "underperform" rating to an "outperform" rating in a research report on Monday, October 5th. Scotiabank raised their target price on shares of Microsoft from $510.00 to $615.00 and gave the company an "outperform" rating in a research note on Monday, October 5th. Royal Bank Of Canada restated an "outperform" rating on shares of Microsoft in a research report on Thursday, September 10th. Finally, Yorkville Ives started coverage on shares of Microsoft in a research report on Monday, October 5th. They set an "outperform" rating and a $615.00 price target on the stock. Forty-three research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, Microsoft has a consensus rating of "Moderate Buy" and a consensus target price of $592.15.

Microsoft Price Performance

Shares of MSFT opened at $524.51 on Monday. The firm has a market capitalization of $3.90 trillion, a price-to-earnings ratio of 29.20, a price-to-earnings-growth ratio of 1.68 and a beta of 1.10. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. Microsoft has a one year low of $349.20 and a one year high of $553.72. The stock's fifty day moving average is $508.51 and its 200-day moving average is $446.69.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced 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. Microsoft had a return on equity of 31.98% and a net margin of 40.31%. The company had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. During the same quarter in the previous year, the firm posted $3.65 EPS. The firm's quarterly revenue was up 17.7% on a year-over-year basis.

Institutional Trading of Microsoft

A number of large investors have recently added to or reduced their stakes in MSFT. State Street Corp raised its holdings in Microsoft by 2.9% during the 2nd quarter. State Street Corp now owns 315,653,206 shares of the software giant's stock worth $117,744,959,000 after buying an additional 8,944,917 shares during the period. Bank of America Corp DE acquired a new position in shares of Microsoft in the second quarter worth about $27,338,370,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its holdings in shares of Microsoft by 0.9% in the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 64,375,360 shares of the software giant's stock worth $24,013,297,000 after buying an additional 543,172 shares during the period. Legal & General Group Plc acquired a new position in shares of Microsoft in the second quarter worth about $18,306,443,000. Finally, Amundi increased its position in shares of Microsoft by 12.0% in the second quarter. Amundi now owns 46,694,778 shares of the software giant's stock worth $17,418,076,000 after acquiring an additional 5,019,702 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors.

Insider Buying and Selling at Microsoft

In other news, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares of the company's stock, valued at $21,188,276.96. The trade was a 10.13% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, CEO Satya Nadella sold 86,525 shares of the business's stock in a transaction that occurred on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the completion of the sale, the chief executive officer owned 486,763 shares in the company, valued at $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 150,314 shares of company stock worth $75,404,992. Company insiders own 0.03% of the company's stock.

Microsoft Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be given a dividend of $0.98 per share. This is a positive change from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date is Thursday, November 19th. This represents a $3.92 annualized dividend and a dividend yield of 0.7%. Microsoft's payout ratio is 20.27%.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure and earnings expectations remain strong. Bank of America reaffirmed its Buy rating and forecast approximately 44.8% Azure growth. Analysts expect quarterly results to be broadly in line with estimates, with Azure strength potentially offsetting heavy investment in AI infrastructure. Microsoft Stock Forecast: BofA Reaffirms Buy Ahead of Earnings
• Positive Sentiment: Microsoft’s custom silicon and security businesses could support future cloud margins. The Maia AI accelerator and other internally developed chips may reduce reliance on Nvidia, improve cost control and retain more economics from Microsoft’s AI services. Investors are also watching whether security growth helps offset data-center expenses. Microsoft: Security And Silicon Set The Stage For Cloud Margin Recovery
• Positive Sentiment: Medical AI results add another potential growth opportunity. Microsoft’s MAI-DxO reportedly diagnosed complex cases more than twice as often as general physicians in a simulation, strengthening the company’s positioning in healthcare AI, although commercialization and regulatory hurdles remain. Microsoft develops AI tool that can diagnose sequentially like a doctor
• Neutral Sentiment: The upcoming report is a major near-term catalyst. Investors will focus on Azure growth, Copilot adoption, AI monetization, capital expenditures, backlog conversion and management’s outlook. The stock is trading near its yearly high, raising expectations for a strong forecast. Microsoft's Earnings Problem: Even Great May Not Be Enough
• Negative Sentiment: AI spending and market conditions could pressure valuation and margins. Investors have recently sold some technology shares when companies raised infrastructure budgets, while a weaker overall market and higher oil prices have added volatility. Microsoft’s large data-center investment must translate into revenue growth to justify the spending. Microsoft Earnings Report To Focus On AI Momentum, Capex
• Negative Sentiment: Operational and product concerns remain. Microsoft withdrew from a U.K. data-center deal because of power-delivery delays, and Xbox cloud-streaming price changes have generated customer friction. Former CEO Bill Gates has also warned about AI safety risks, potentially increasing regulatory scrutiny. Microsoft pulls out of UK Nscale data centre deal over power delay

Microsoft Company Profile

Microsoft Corporation NASDAQ: MSFT is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company's principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.