FY2027 Earnings Estimate for Microsoft Issued By Scotiabank

Key Points

• Scotiabank lowered Microsoft’s FY2027 EPS estimate to $19.05 from $19.49 but maintained an “Outperform” rating, well above the current consensus estimate of $16.70.
• Microsoft reported a strong quarter, with $4.74 EPS and $90.01 billion in revenue, beating estimates; revenue increased 17.7% year over year, while Azure revenue rose 43%.
• Analysts remain broadly bullish, with 42 Buy ratings and six Holds and an average price target of $555.76, though investors continue to monitor AI infrastructure costs, returns and regulatory risks.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Scotiabank lowered their FY2027 EPS estimates for shares of Microsoft in a report issued on Wednesday, July 29th. Scotiabank analyst P. Colville now anticipates that the software giant will post earnings per share of $19.05 for the year, down from their previous forecast of $19.49. Scotiabank currently has a "Outperform" rating on the stock. The consensus estimate for Microsoft's current full-year earnings is $16.70 per share.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. The company had revenue of $90.01 billion during the quarter, compared to analysts' expectations of $87.62 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The firm's revenue was up 17.7% on a year-over-year basis. During the same quarter in the previous year, the business earned $3.65 EPS.

Several other equities research analysts also recently issued reports on MSFT. Tigress Financial boosted their price objective on shares of Microsoft from $595.00 to $680.00 and gave the stock a "buy" rating in a research note on Wednesday, May 6th. China Renaissance decreased their target price on shares of Microsoft from $630.00 to $550.00 and set a "buy" rating for the company in a research note on Monday, May 4th. TD Cowen reissued a "buy" rating and set a $540.00 price target on shares of Microsoft in a research report on Thursday, June 4th. UBS Group lowered their price objective on shares of Microsoft from $510.00 to $480.00 and set a "buy" rating for the company in a research report on Monday. Finally, Dbs Bank reduced their price objective on Microsoft from $678.00 to $573.00 in a research report on Thursday, May 7th. Forty-two analysts have rated the stock with a Buy rating and six have given a Hold rating to the stock. According to MarketBeat, Microsoft has an average rating of "Moderate Buy" and an average target price of $555.76.

Microsoft Stock Performance

Microsoft stock opened at $390.54 on Thursday. The company has a market cap of $2.90 trillion, a price-to-earnings ratio of 23.25, a price-to-earnings-growth ratio of 1.20 and a beta of 1.13. Microsoft has a 12 month low of $349.20 and a 12 month high of $555.45. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The stock's 50-day moving average is $396.43 and its 200-day moving average is $405.74.

Microsoft Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be given a $0.91 dividend. This represents a $3.64 annualized dividend and a yield of 0.9%. The ex-dividend date is Thursday, August 20th. Microsoft's dividend payout ratio (DPR) is currently 21.67%.

Insider Activity at Microsoft

In other news, CEO Judson Althoff sold 15,500 shares of the stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the transaction, the chief executive officer owned 110,477 shares of the company's stock, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. Also, EVP Takeshi Numoto sold 4,500 shares of the firm's stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total value of $1,812,780.00. Following the transaction, the executive vice president directly owned 47,468 shares in the company, valued at $19,122,009.12. This trade represents a 8.66% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 23,762 shares of company stock worth $10,508,361 in the last three months. 0.03% of the stock is owned by company insiders.

Institutional Trading of Microsoft

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Longfellow Investment Management Co. LLC raised its position in Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after acquiring an additional 20 shares in the last quarter. Shepherd Kaplan Krochuk LLC grew its stake in shares of Microsoft by 4.9% in the 3rd quarter. Shepherd Kaplan Krochuk LLC now owns 431 shares of the software giant's stock worth $223,000 after purchasing an additional 20 shares during the last quarter. Fischer Investment Strategies LLC raised its holdings in shares of Microsoft by 3.1% in the 4th quarter. Fischer Investment Strategies LLC now owns 697 shares of the software giant's stock worth $337,000 after purchasing an additional 21 shares in the last quarter. Pollock Investment Advisors LLC lifted its stake in Microsoft by 0.8% during the third quarter. Pollock Investment Advisors LLC now owns 2,805 shares of the software giant's stock valued at $1,453,000 after purchasing an additional 21 shares during the last quarter. Finally, Better Money Decisions LLC boosted its holdings in Microsoft by 0.6% during the second quarter. Better Money Decisions LLC now owns 3,498 shares of the software giant's stock worth $1,740,000 after buying an additional 21 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings and cloud growth: Microsoft reported quarterly revenue of approximately $90.0 billion, up 17.7% year over year and above the $87.6 billion consensus estimate. Adjusted earnings per share of $4.74 also exceeded expectations of roughly $4.24. Azure revenue rose 43%, ahead of forecasts, and Azure surpassed $100 billion in annual revenue. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: AI monetization is gaining traction: Microsoft said Copilot exceeded 30 million paid seats, while growing Azure and Microsoft 365 usage suggested that AI demand is translating into higher cloud consumption and subscription revenue. Management also highlighted expanding AI capacity and a large commercial backlog. Meta tanks, Microsoft jumps as the AI trade splits Big Tech
• Positive Sentiment: Capital-spending concerns eased: Microsoft kept its AI capital-expenditure outlook broadly unchanged, unlike Alphabet’s recent upward revision, and emphasized that GPU spending can be moderated if demand cools. The company is also extending data-center lifespans to reduce buildout costs. Goldman Sachs raised its Microsoft price target to $640, while Citizens JMP reiterated its Market Outperform rating. Microsoft keeps capex forecast unchanged
• Neutral Sentiment: Key issue remains AI returns: Microsoft continues to spend heavily on data centers and AI infrastructure, so investors will monitor margins, free cash flow and the pace at which Copilot converts users into profitable consumption. The company’s first-quarter fiscal 2027 revenue guidance of $89.9 billion to $91.0 billion was slightly above consensus. Microsoft beats Wall Street expectations
• Negative Sentiment: Regulatory and competitive risks persist: U.K. regulators are investigating Microsoft’s Microsoft 365 subscription marketing, while Disney reportedly plans to replace GitHub Copilot with OpenAI’s Codex. These developments are unlikely to outweigh the earnings strength today but could pressure monetization and reputation over time. UK investigates Microsoft over 365 subscriptions

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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