Microsoft (NASDAQ:MSFT) Downgraded by Wall Street Zen to "Hold"

Key Points

• Microsoft has been downgraded from a "buy" to a "hold" rating by Wall Street Zen, indicating a more cautious outlook from analysts.
• Despite the downgrade, several analysts have issued target price increases, with UBS Group, Scotiabank, and DA Davidson raising their price targets to $650.00.
• Microsoft's recent earnings report showed an increase in revenue to $76.44 billion, surpassing estimates, and a year-over-year revenue growth of 18.1%.

Wall Street Zen cut shares of Microsoft (NASDAQ:MSFT - Free Report) from a buy rating to a hold rating in a report issued on Saturday.

Several other brokerages also recently commented on MSFT. Cantor Fitzgerald increased their price objective on shares of Microsoft from $581.00 to $639.00 and gave the company an "overweight" rating in a research note on Thursday, July 31st. Piper Sandler upped their price target on shares of Microsoft from $600.00 to $650.00 and gave the company an "overweight" rating in a research report on Thursday, July 31st. Oppenheimer upped their price target on shares of Microsoft from $600.00 to $630.00 and gave the company an "outperform" rating in a research report on Thursday, July 31st. Wedbush upped their price target on shares of Microsoft from $600.00 to $625.00 and gave the company an "outperform" rating in a research report on Thursday, July 31st. Finally, Royal Bank Of Canada increased their price objective on shares of Microsoft from $525.00 to $640.00 and gave the stock an "outperform" rating in a research report on Thursday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat.com, Microsoft has an average rating of "Moderate Buy" and a consensus price target of $612.54.

Microsoft Price Performance

NASDAQ:MSFT traded down $1.53 on Friday, hitting $512.92. The company had a trading volume of 2,115,980 shares, compared to its average volume of 22,115,541. The stock has a market capitalization of $3.81 trillion, a price-to-earnings ratio of 37.58, a PEG ratio of 2.26 and a beta of 1.04. The company has a current ratio of 1.35, a quick ratio of 1.35 and a debt-to-equity ratio of 0.12. The firm has a 50 day moving average of $511.94 and a two-hundred day moving average of $459.59. Microsoft has a 52 week low of $344.79 and a 52 week high of $555.45.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data on Wednesday, July 30th. The software giant reported $3.65 EPS for the quarter, beating the consensus estimate of $3.35 by $0.30. The business had revenue of $76.44 billion during the quarter, compared to the consensus estimate of $73.79 billion. Microsoft had a net margin of 36.15% and a return on equity of 32.44%. The firm's revenue was up 18.1% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $2.95 EPS. Microsoft has set its Q1 2026 guidance at EPS. On average, research analysts anticipate that Microsoft will post 13.08 earnings per share for the current year.

Microsoft Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 11th. Stockholders of record on Thursday, November 20th will be paid a $0.91 dividend. The ex-dividend date is Thursday, November 20th. This is a positive change from Microsoft's previous quarterly dividend of $0.83. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. Microsoft's dividend payout ratio is 24.34%.

Insider Activity

In related news, CEO Satya Nadella sold 149,205 shares of the business's stock in a transaction that occurred on Wednesday, September 3rd. The shares were sold at an average price of $504.78, for a total transaction of $75,315,699.90. Following the completion of the transaction, the chief executive officer owned 790,852 shares of the company's stock, valued at approximately $399,206,272.56. The trade was a 15.87% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Takeshi Numoto sold 4,850 shares of the business's stock in a transaction that occurred on Tuesday, August 12th. The shares were sold at an average price of $527.32, for a total transaction of $2,557,502.00. Following the transaction, the executive vice president directly owned 39,111 shares of the company's stock, valued at approximately $20,624,012.52. This represents a 11.03% decrease in their position. The disclosure for this sale can be found here. 0.03% of the stock is owned by company insiders.

Hedge Funds Weigh In On Microsoft

Hedge funds have recently bought and sold shares of the company. Norges Bank bought a new stake in Microsoft during the fourth quarter valued at approximately $44,343,058,000. Kingstone Capital Partners Texas LLC lifted its holdings in shares of Microsoft by 564,387.1% in the 2nd quarter. Kingstone Capital Partners Texas LLC now owns 90,549,369 shares of the software giant's stock worth $45,040,162,000 after acquiring an additional 90,533,328 shares during the last quarter. Nuveen LLC bought a new stake in shares of Microsoft in the 1st quarter worth approximately $18,733,827,000. GAMMA Investing LLC lifted its holdings in shares of Microsoft by 40,290.4% in the 1st quarter. GAMMA Investing LLC now owns 46,695,303 shares of the software giant's stock worth $17,528,950,000 after acquiring an additional 46,579,693 shares during the last quarter. Finally, Laurel Wealth Advisors LLC lifted its holdings in shares of Microsoft by 49,640.3% in the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant's stock worth $14,905,904,000 after acquiring an additional 29,906,791 shares during the last quarter. Hedge funds and other institutional investors own 71.13% of the company's stock.

Microsoft Company Profile

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.