Microsoft's (MSFT) Buy Rating Reaffirmed at Royal Bank Of Canada

Key Points

• Royal Bank of Canada reiterated its buy rating on Microsoft, while several other analysts also maintained bullish views despite trimming price targets.
• Microsoft recently posted better-than-expected quarterly results, with EPS of $4.27 versus $4.06 expected and revenue of $82.89 billion versus $81.44 billion anticipated, up 18.3% year over year.
• The stock was trading around $419.09, and the article highlights ongoing AI-related catalysts—including a $1 billion Microsoft-EY initiative and reports of possible demand for Microsoft’s Maia AI chips—as reasons some see upside ahead.

Microsoft (NASDAQ:MSFT - Get Free Report)'s stock had its "buy" rating reiterated by equities researchers at Royal Bank Of Canada in a note issued to investors on Friday,MarketScreener reports.

A number of other research analysts also recently issued reports on the stock. BNP Paribas Exane reduced their price objective on shares of Microsoft from $556.00 to $555.00 and set an "outperform" rating on the stock in a research report on Friday, May 1st. KeyCorp dropped their target price on shares of Microsoft from $630.00 to $600.00 and set an "overweight" rating for the company in a research report on Thursday, January 29th. New Street Research cut their target price on shares of Microsoft from $675.00 to $600.00 and set a "buy" rating on the stock in a research note on Thursday, April 30th. HSBC reduced their price target on shares of Microsoft from $593.00 to $571.00 in a research report on Thursday, April 30th. Finally, Truist Financial lowered their price objective on shares of Microsoft from $675.00 to $575.00 and set a "buy" rating for the company in a report on Thursday, April 30th. Thirty-nine analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company. According to data from MarketBeat.com, Microsoft currently has an average rating of "Moderate Buy" and an average price target of $560.88.

Microsoft Trading Down 0.5%

MSFT opened at $419.09 on Friday. Microsoft has a one year low of $356.28 and a one year 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 business has a 50 day simple moving average of $399.10 and a two-hundred day simple moving average of $437.61. The firm has a market capitalization of $3.11 trillion, a price-to-earnings ratio of 24.95, a PEG ratio of 1.52 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.06 by $0.21. The firm had revenue of $82.89 billion for the quarter, compared to analysts' expectations of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The business's revenue was up 18.3% compared to the same quarter last year. During the same period in the previous year, the firm earned $3.46 earnings per share. Analysts predict that Microsoft will post 16.76 EPS for the current year.

Insider Transactions at Microsoft

In other Microsoft news, EVP Kathleen T. Hogan sold 12,321 shares of the company's stock in a transaction dated Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the sale, the executive vice president owned 137,933 shares in the company, valued at approximately $56,486,322.16. This represents a 8.20% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, EVP Amy Coleman sold 1,262 shares of the firm's stock in a transaction that occurred on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total transaction of $519,111.08. Following the transaction, the executive vice president directly owned 46,003 shares of the company's stock, valued at $18,922,874.02. This represents a 2.67% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.03% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the stock. WFA Asset Management Corp boosted its position in shares of Microsoft by 27.0% during the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock valued at $427,000 after buying an additional 216 shares during the last quarter. Ironwood Wealth Management LLC. boosted its stake in shares of Microsoft by 0.3% in the 2nd quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock worth $5,658,000 after buying an additional 38 shares during the last quarter. Discipline Wealth Solutions LLC grew its holdings in shares of Microsoft by 410.4% in the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock worth $1,144,000 after acquiring an additional 2,138 shares during the period. Wealth Group Ltd. increased its position in Microsoft by 1.2% during the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant's stock valued at $1,000,000 after acquiring an additional 28 shares during the last quarter. Finally, Eagle Capital Management LLC increased its position in Microsoft by 0.4% during the fourth quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant's stock valued at $9,735,000 after acquiring an additional 96 shares during the last quarter. Hedge funds and other institutional investors own 71.13% of the company's stock.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft and EY launched a $1 billion effort to help customers adopt AI, reinforcing MSFT’s enterprise AI monetization story. Microsoft and EY Team to Promote Corporate AI Adoption
• Positive Sentiment: Reports that Anthropic is in talks to use Microsoft’s Maia AI chips point to potential demand for Microsoft’s custom AI hardware and Azure infrastructure. Anthropic, Microsoft in talks for AI chip deal after $5 billion investment
• Positive Sentiment: Some analysts and commentary argue the recent selloff has left Microsoft looking undervalued relative to its long-term AI growth prospects. Microsoft Stock Discount May Be Ending as AI Catalysts Build

Microsoft Company Profile

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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