What is Scotiabank's Estimate for Microsoft FY2027 Earnings?

Key Points

• Scotiabank analyst P. Colville forecasts Microsoft will earn $19.49 EPS in FY2027, and the firm has an Outperform rating with a $550 price target versus the consensus full‑year estimate of $16.68.
• Microsoft beat Q3 expectations—$4.27 EPS on $82.89B revenue—with management citing 40%+ Azure/cloud growth and accelerating AI monetization, and recent Pentagon agreements bolster potential government AI revenue.
• Those positives are tempered by record capital spending (roughly $190B guidance) and near‑term free‑cash‑flow pressure, prompting some brokers to trim targets even as the average analyst price target sits near $556.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Equities researchers at Scotiabank issued their FY2027 earnings per share (EPS) estimates for Microsoft in a research note issued to investors on Friday, May 1st. Scotiabank analyst P. Colville forecasts that the software giant will earn $19.49 per share for the year. Scotiabank has a "Outperform" rating and a $550.00 price target 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 posted its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, beating analysts' consensus estimates of $4.06 by $0.21. The company 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%.Microsoft's quarterly revenue was up 18.3% on a year-over-year basis. During the same period last year, the firm earned $3.46 earnings per share.

Several other equities research analysts have also recently weighed in on MSFT. Daiwa Securities Group decreased their target price on Microsoft from $630.00 to $600.00 and set a "buy" rating for the company in a research note on Wednesday, February 4th. DZ Bank reissued a "buy" rating on shares of Microsoft in a report on Thursday. Robert W. Baird reduced their price objective on shares of Microsoft from $540.00 to $500.00 and set an "outperform" rating for the company in a research report on Wednesday, April 15th. Bank of America assumed coverage on shares of Microsoft in a report on Tuesday, March 24th. They issued a "buy" rating and a $500.00 target price for the company. Finally, UBS Group reaffirmed a "buy" rating on shares of Microsoft in a research report on Friday, April 24th. One analyst has rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating and five have assigned a Hold rating to the company's stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $556.15.

Microsoft Trading Down 0.0%

MSFT opened at $414.41 on Monday. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. Microsoft has a one year low of $356.28 and a one year high of $555.45. The company has a market cap of $3.08 trillion, a P/E ratio of 24.67, a PEG ratio of 1.55 and a beta of 1.10. The business's 50-day simple moving average is $395.28 and its 200-day simple moving average is $447.45.

Microsoft Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be paid a $0.91 dividend. The ex-dividend date is Thursday, May 21st. This represents a $3.64 dividend on an annualized basis and a yield of 0.9%. Microsoft's payout ratio is currently 21.67%.

Insider Transactions at Microsoft

In related news, Director John W. Stanton purchased 5,000 shares of the stock in a transaction that occurred on Wednesday, February 18th. The shares were purchased at an average price of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the acquisition, the director directly owned 83,905 shares in the company, valued at $33,339,651.75. This represents a 6.34% increase in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business'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 completion of the transaction, the executive vice president owned 137,933 shares in the company, valued at $56,486,322.16. This trade represents a 8.20% 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 Trading of Microsoft

A number of hedge funds have recently added to or reduced their stakes in the stock. Longfellow Investment Management Co. LLC boosted its holdings in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after acquiring an additional 20 shares in the last quarter. Bernzott Capital Advisors purchased a new position in Microsoft during the fourth quarter worth about $34,000. Timmons Wealth Management LLC acquired a new stake in Microsoft in the fourth quarter valued at about $36,000. Bayforest Capital Ltd acquired a new stake in Microsoft in the third quarter valued at about $38,000. Finally, Fairway Wealth LLC boosted its holdings in Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant's stock valued at $43,000 after purchasing an additional 66 shares in the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q3 results and the earnings call highlighted 40%+ Azure/cloud growth and accelerating AI monetization, giving investors confidence in the company’s long-term AI revenue runway. Microsoft Earnings Call: AI Growth Surges, Margins Squeezed
• Positive Sentiment: The U.S. Pentagon signed agreements allowing Microsoft’s AI tech on classified networks — a credibility and contract win that can translate into long-term, high‑value government revenue. Pentagon inks deals with Nvidia, Microsoft and AWS to deploy AI on classified networks
• Positive Sentiment: Analyst actions include several price‑target raises and reaffirmations (Benchmark raised to $525, others keep buy ratings), signaling continued bullish conviction among some buy‑side firms. Microsoft Corp. (MSFT) Price Target Increased to $525 by Benchmark
• Positive Sentiment: Product catalyst: rollout of Windows 11’s new Xbox Mode supports consumer engagement and adds a near‑term, tangible product story for the stock. Microsoft Stock (MSFT) Jumps on Windows 11 Xbox Mode Rollout
• Neutral Sentiment: The revised Microsoft–OpenAI relationship (ending exclusivity) is being parsed by markets: it reduces some exclusivity upside but clarifies commercial terms that could be neutral-to-positive longer term depending on monetization. Microsoft and OpenAI Just Ended Their Exclusive Deal, and Wall Street Is Trying Hard to Shake Off the Negatives for MSFT Stock
• Neutral Sentiment: Commentary from TV/hosts (e.g., Jim Cramer) describes MSFT as attractively valued but notes limited new messaging on the call — this shapes retail sentiment but isn’t new fundamental data. Jim Cramer on Microsoft: “Maybe You Can Consider It Cheap, But It’s Software”
• Negative Sentiment: Investors remain focused on record capex (roughly $190B guidance) and the near‑term hit to free cash flow — that spending narrative caused the post‑earnings pullback and continues to cap the multiple. Beat meets bill: MSFT stock slips on AI expenditure concerns despite strong Q3
• Negative Sentiment: Goldman’s note flagging extreme cloud cash burn and other outlets highlighting the industry’s rising AI capex raises concern that spending could pressure margins and returns if monetization lags. Microsoft, Amazon On Watch ― Goldman Sounds Alarm On 90% Cloud Cash Burn
• Negative Sentiment: Some brokers trimmed price targets or cut upside on valuation as they bake in capex risk (HSBC cut its target), keeping a portion of the market cautious. HSBC Cuts Microsoft Price Target to $571 From $593

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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