Erste Group Bank Estimates Microsoft FY2028 Earnings

Key Points

• Erste Group Bank slightly lowered Microsoft’s FY2028 earnings estimate to $23.47 per share from $23.51, still well above the current consensus estimate of $19.65.
• Microsoft’s latest quarter exceeded expectations, reporting $4.74 in EPS versus $4.24 expected and $90.01 billion in revenue versus $87.62 billion forecast; revenue increased 17.7% year over year.
• AI and cloud growth remain major catalysts: Microsoft plans broad deployment of its Maia 300 AI chip beginning in 2027, while Azure demand, data-center leases and analyst price-target increases support the stock’s “Moderate Buy” consensus rating.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Erste Group Bank lowered their FY2028 earnings estimates for shares of Microsoft in a research note issued on Thursday, October 8th. Erste Group Bank analyst H. Engel now anticipates that the software giant will post earnings of $23.47 per share for the year, down from their prior forecast of $23.51. The consensus estimate for Microsoft's current full-year earnings is $19.65 per share.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data 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 company 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 firm's revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the business posted $3.65 earnings per share.

Several other research firms have also recently weighed in on MSFT. Weiss Ratings raised Microsoft from a "hold (c+)" rating to a "buy (b-)" rating in a report on Thursday, October 8th. Wolfe Research downgraded Microsoft from an "outperform" rating to a "hold" rating in a research report on Wednesday, September 23rd. Wells Fargo & Company boosted their price objective on Microsoft from $700.00 to $725.00 and gave the stock an "overweight" rating in a report on Thursday, October 1st. UBS Group lowered Microsoft from a "buy" rating to a "market perform" rating in a report on Monday, October 5th. Finally, Barclays upped their price objective on shares of Microsoft from $512.00 to $600.00 and gave the stock an "overweight" rating in a research report on Tuesday. Forty-one investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, Microsoft currently has an average rating of "Moderate Buy" and a consensus price target of $581.80.

Microsoft Price Performance

Microsoft stock opened at $543.45 on Wednesday. Microsoft has a 52 week low of $349.20 and a 52 week high of $553.72. The business has a 50-day simple moving average of $503.23 and a 200 day simple moving average of $437.50. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The stock has a market cap of $4.04 trillion, a price-to-earnings ratio of 30.26, a PEG ratio of 1.74 and a beta of 1.10.

Microsoft Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be paid a $0.98 dividend. This is a boost from Microsoft's previous quarterly dividend of $0.91. This represents a $3.92 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date of this dividend is Thursday, November 19th. Microsoft's payout ratio is currently 20.27%.

Insider Transactions at Microsoft

In other Microsoft news, CEO Judson Althoff sold 10,000 shares of Microsoft stock in a transaction dated Wednesday, August 5th. The stock was 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. The trade was a 9.05% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, EVP Amy Hood sold 41,674 shares of Microsoft stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $498.27, for a total value of $20,764,903.98. Following the sale, the executive vice president directly owned 533,624 shares of the company's stock, valued at approximately $265,888,830.48. This trade represents a 7.24% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 143,009 shares of company stock worth $71,420,699. Company insiders own 0.03% of the company's stock.

Institutional Trading of Microsoft

Hedge funds have recently bought and sold shares of the company. State Street Corp lifted its holdings in Microsoft by 2.9% in the second quarter. State Street Corp now owns 315,653,206 shares of the software giant's stock valued at $117,744,959,000 after acquiring an additional 8,944,917 shares during the period. Bank of America Corp DE bought a new stake in shares of Microsoft during the 2nd quarter valued at about $27,338,370,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its position in shares of Microsoft by 0.9% during the 2nd 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 valued at $24,013,297,000 after purchasing an additional 543,172 shares during the last quarter. Auto Owners Insurance Co increased its position in shares of Microsoft by 56,160.8% during the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock valued at $29,073,486,000 after purchasing an additional 60,009,531 shares during the last quarter. Finally, Legal & General Group Plc bought a new position in shares of Microsoft in the 2nd quarter worth approximately $18,306,443,000. Institutional investors own 71.13% of the company's stock.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Maia 300 strengthens Microsoft’s AI infrastructure strategy. Microsoft unveiled its third-generation Maia 300 AI chip and plans multi-gigawatt deployments beginning in 2027. The company says the chip can deliver approximately 40% more AI-generated tokens per megawatt or dollar than leading GPU-based systems, potentially lowering computing costs and reducing reliance on Nvidia and AMD. Microsoft Reveals Next-Gen Maia 300 Custom AI Chip For Widespread Deployment
• Positive Sentiment: AI and cloud demand remain major valuation catalysts. Reports highlight accelerating Azure demand, a record commercial backlog and more than $130 billion in new data-center leases, supporting expectations for continued growth in cloud and AI services. Microsoft also has several generations of proprietary AI chips, giving investors a potential long-term margin and supply-chain advantage. Microsoft Reports $130 Billion in Data Center Leases
• Positive Sentiment: Analyst optimism provides additional support. Barclays raised its Microsoft price target to $600 from $512 and expects greater differentiation in software as the next quarter progresses. The company is scheduled to report fiscal first-quarter results on October 28, with analysts looking for roughly $4.72 in earnings per share and $90.4 billion in revenue. Microsoft price target raised to $600 from $512 at Barclays

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft's productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.

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