Microsoft (NASDAQ:MSFT) Shares Up 2.2% on Analyst Upgrade

Key Points

• Microsoft's shares rose by 2.2% after Wells Fargo upgraded its price target from $650.00 to $675.00, maintaining an overweight rating on the stock.
• The company's quarterly earnings report showed a growth in revenue by 18.1% year-over-year, along with an impressive $3.65 EPS, surpassing analysts' expectations.
• Microsoft plans to increase its quarterly dividend to $0.91, up from $0.83, effective for shareholders on record by November 20th.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) shares traded up 2.2% during mid-day trading on Monday after Wells Fargo & Company raised their price target on the stock from $650.00 to $675.00. Wells Fargo & Company currently has an overweight rating on the stock. Microsoft traded as high as $531.03 and last traded at $528.57. 21,277,451 shares changed hands during mid-day trading, a decline of 3% from the average session volume of 22,021,971 shares. The stock had previously closed at $517.35.

MSFT has been the topic of a number of other research reports. Cantor Fitzgerald upped their target price on shares of Microsoft from $581.00 to $639.00 and gave the company an "overweight" rating in a research report on Thursday, July 31st. Wall Street Zen raised Microsoft from a "hold" rating to a "buy" rating in a research note on Friday. KeyCorp raised shares of Microsoft from a "sector weight" rating to an "overweight" rating and set a $630.00 price objective on the stock in a research report on Thursday, July 31st. Wedbush raised their target price on Microsoft from $600.00 to $625.00 and gave the stock an "outperform" rating in a research report on Thursday, July 31st. Finally, Truist Financial lifted their price target on shares of Microsoft from $650.00 to $675.00 and gave the stock a "buy" rating in a research note on Monday, August 18th. One equities research analyst has rated the stock with a Strong Buy rating, thirty-one have issued a Buy rating and two have given a Hold rating to the stock. According to MarketBeat.com, Microsoft currently has a consensus rating of "Moderate Buy" and an average target price of $618.47.

Insider Transactions at Microsoft

In other Microsoft news, CEO Satya Nadella sold 149,205 shares of the company's stock in a transaction dated 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 transaction, the chief executive officer directly owned 790,852 shares in the company, valued at approximately $399,206,272.56. This represents a 15.87% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, EVP Takeshi Numoto sold 4,850 shares of the stock in a transaction dated 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 completion of the transaction, the executive vice president directly owned 39,111 shares of the company's stock, valued at approximately $20,624,012.52. This trade represents a 11.03% decrease in their ownership of the stock. The disclosure for this sale can be found here. 0.03% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Microsoft

Several hedge funds have recently added to or reduced their stakes in MSFT. Newton One Investments LLC increased its position in Microsoft by 66.7% during the 1st quarter. Newton One Investments LLC now owns 75 shares of the software giant's stock worth $28,000 after purchasing an additional 30 shares in the last quarter. 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 valued at $29,000 after buying an additional 20 shares during the period. Ball & Co Wealth Management Inc. acquired a new stake in Microsoft during the fourth quarter worth approximately $31,000. Bulwark Capital Corp acquired a new stake in Microsoft during the second quarter worth approximately $32,000. Finally, Westend Capital Management LLC grew its stake in Microsoft by 386.7% in the 2nd quarter. Westend Capital Management LLC now owns 73 shares of the software giant's stock worth $36,000 after acquiring an additional 58 shares during the period. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Microsoft Price Performance

The company has a market capitalization of $3.93 trillion, a price-to-earnings ratio of 38.75, a P/E/G ratio of 2.25 and a beta of 1.03. The company has a fifty day simple moving average of $512.83 and a two-hundred day simple moving average of $467.74. The company has a debt-to-equity ratio of 0.12, a quick ratio of 1.35 and a current ratio of 1.35.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings data on Wednesday, July 30th. The software giant reported $3.65 EPS for the quarter, beating analysts' consensus estimates 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 return on equity of 32.44% and a net margin of 36.15%.The business's revenue for the quarter was up 18.1% on a year-over-year basis. During the same quarter in the previous year, the business earned $2.95 earnings per share. Microsoft has set its Q1 2026 guidance at EPS. As a group, research analysts anticipate that Microsoft Corporation will post 13.08 earnings per share for the current year.

Microsoft Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 11th. Shareholders of record on Thursday, November 20th will be issued a $0.91 dividend. This is a boost from Microsoft's previous quarterly dividend of $0.83. The ex-dividend date is Thursday, November 20th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. Microsoft's dividend payout ratio (DPR) is 24.34%.

About Microsoft

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.

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