What is Scotiabank's Estimate for Microsoft FY2026 Earnings?

Key Points

• Scotiabank analyst P. Colville forecasts Microsoft will post FY2026 EPS of $16.71 and keeps an Outperform rating with a $550 price target.
• Microsoft last quarter delivered $4.27 EPS, beating estimates by $0.21, with revenue of $82.89 billion (up 18.3% year‑over‑year) and strong profitability (net margin 39.34%).
• While several brokers have trimmed price targets recently, the Street consensus remains a Moderate Buy with an average target near $556.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Stock analysts at Scotiabank issued their FY2026 earnings per share (EPS) estimates for shares of Microsoft in a research note issued to investors on Friday, May 1st. Scotiabank analyst P. Colville forecasts that the software giant will post earnings per share of $16.71 for the year. Scotiabank currently has a "Outperform" rating and a $550.00 target price on the stock. The consensus estimate for Microsoft's current full-year earnings is $16.68 per share.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly 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. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company had revenue of $82.89 billion for the quarter, compared to analysts' expectations of $81.44 billion. During the same period last year, the firm earned $3.46 EPS. The firm's revenue for the quarter was up 18.3% on a year-over-year basis.

MSFT has been the subject of several other reports. China Renaissance reduced their price objective on Microsoft from $630.00 to $550.00 and set a "buy" rating for the company in a research note on Monday. DA Davidson reduced their price objective on Microsoft from $650.00 to $550.00 and set a "buy" rating for the company in a research note on Thursday, April 30th. Cantor Fitzgerald reduced their price objective on Microsoft to $502.00 and set an "overweight" rating for the company in a research note on Monday, April 27th. Rothschild & Co Redburn reduced their price objective on Microsoft from $450.00 to $400.00 and set a "neutral" rating for the company in a research note on Thursday, April 23rd. Finally, William Blair reissued an "outperform" rating on shares of Microsoft in a research note on Monday, March 9th. One analyst has rated the stock with a Strong Buy rating, thirty-nine have given a Buy rating and five have issued a Hold rating to the company. According to MarketBeat.com, Microsoft currently has an average rating of "Moderate Buy" and a consensus price target of $556.00.

Microsoft Stock Down 0.2%

Shares of MSFT stock opened at $413.62 on Tuesday. The stock has a market cap of $3.07 trillion, a PE ratio of 24.62, a price-to-earnings-growth ratio of 1.55 and a beta of 1.10. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The business's fifty day moving average is $395.28 and its 200-day moving average is $447.45. Microsoft has a 1 year low of $356.28 and a 1 year high of $555.45.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be given a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.9%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft's dividend payout ratio (DPR) is 21.67%.

Insider Buying and Selling at Microsoft

In other Microsoft news, Director John W. Stanton bought 5,000 shares of the firm's stock in a transaction dated Wednesday, February 18th. The stock was acquired at an average price of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the transaction, the director directly owned 83,905 shares in the company, valued at approximately $33,339,651.75. This represents a 6.34% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP Kathleen T. Hogan sold 12,321 shares of the firm's stock in a transaction on Friday, March 6th. The stock was sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the sale, the executive vice president directly owned 137,933 shares of the company's stock, valued at approximately $56,486,322.16. This trade represents a 8.20% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 0.03% of the company's stock.

Institutional Trading of Microsoft

Several hedge funds and other institutional investors have recently modified their holdings of the business. WFA Asset Management Corp raised its holdings 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 worth $427,000 after acquiring an additional 216 shares in the last quarter. Ironwood Wealth Management LLC. raised its holdings in shares of Microsoft by 0.3% during the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock worth $5,658,000 after acquiring an additional 38 shares in the last quarter. Discipline Wealth Solutions LLC raised its holdings in shares of Microsoft by 410.4% during 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 in the last quarter. Wealth Group Ltd. raised its holdings 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 buying an additional 28 shares in the last quarter. Finally, Eagle Capital Management LLC raised its holdings 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 buying an additional 96 shares in the last quarter. Institutional investors and hedge funds own 71.13% of the company's stock.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Jefferies reaffirmed a buy rating on Microsoft, a vote of confidence from an active sell‑side firm that supports demand for the shares. Microsoft NASDAQ: MSFT Receives Buy Rating from Jefferies Financial Group
• Positive Sentiment: RBC Capital commented on Microsoft’s amended OpenAI deal — the note frames the partnership terms as a strategic positive for long‑term AI revenue and cloud demand, which could underpin MSFT’s growth outlook. Here’s What RBC Capital Thinks About Microsoft (MSFT) After Amended Deal With OpenAI
• Positive Sentiment: Product and execution wins: Microsoft moved Agent 365 out of preview and continues to expand AI agent and Copilot integrations across Microsoft 365 — these enterprise product rollouts help monetize AI inside existing commercial relationships. Microsoft takes Agent 365 out of preview as shadow AI becomes an enterprise threat
• Positive Sentiment: Bull perspective: several analysts and commentators argue MSFT is attractively valued given backlog and cloud visibility, describing the stock as a long‑term compounding opportunity despite near‑term headwinds. Microsoft: A Generational Compounding Opportunity At 21x P/E
• Neutral Sentiment: Price‑target action: China Renaissance trimmed its MSFT target to $550 from $630 but kept a buy rating — a modest downgrade in optics but still implies material upside from current levels. Microsoft NASDAQ: MSFT Price Target Cut to $550.00 by Analysts at China Renaissance
• Negative Sentiment: Investor rotation risk: Altimeter sold Microsoft in favor of Nvidia and SK Hynix — portfolio managers are favoring AI compute/hardware exposure over software/cloud exposure, creating selling pressure for MSFT. Why Altimeter Sold Microsoft For Nvidia, SK Hynix: CEO Gerstner Warns Investors Must 'Make Choices' Between Software And AI Compute
• Negative Sentiment: Cost and margin worries: commentators note the market is currently pricing Microsoft for rising AI infrastructure costs rather than future AI revenue — heavy GPU/infra spend and guidance for lower cloud gross margins are pressuring sentiment. Microsoft: The Market Is Pricing AI Costs, Not AI Returns
• Negative Sentiment: High capex flagged by pundits and TV commentators (e.g., Jim Cramer) remains a headline risk — investors are sensitive to the company’s multiyear GPU and data‑center spend and the timing of return on that investment. Jim Cramer Points to Elevated Capital Spending as a Concern for Microsoft Investors

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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