A Moderate Buy Rating for Microsoft: Analysts Predict 1-Year Price Objective
Software giant Microsoft (NASDAQ:MSFT) has garnered a consensus rating of “Moderate Buy” from no less than thirty-nine research firms currently covering the company. Bloomberg reports that twenty-five analysts have issued a buy recommendation, four suggest holding the stock, and only one has recommended selling it. These ratings are based on the company’s demonstrated performance on the market, as well as its expected potential for future growth.
Interestingly, among brokerages that have updated their coverage of the stock in the last year, one-year price objective estimates vary quite significantly. The average projected target is $325.47 per share – up from its current position at around $254 – but estimates range between $200 to $380. It is worth noting that estimates change constantly and that actual prices remain difficult to predict.
More concretely, Microsoft’s quarterly earnings report published on April 25th revealed some impressive figures: earnings per share of $2.45 (beating a consensus estimate of $2.22), a return on equity of almost 39%, significant net margins over a third higher than revenues during Q1 totalling almost $53 billion (compared to analyst expectations of mere $51 billion). Year-on-year growth came in at an encouraging 7%.
Several institutional investors have taken notice of this success story and invested heavily in Microsoft shares in recent months. DGS Capital Management LLC increased its holdings by nearly 20% in Q1 acquiring an additional 2,383 shares; IFM Investors Pty Ltd boosted theirs by more than 20% after investing more than half a billion dollars; Altus Wealth Group LLC took a smaller stake rising by just over one percent while Powell Investment Advisors LLC added just over two hundred shares.
Microsoft’s solid financial results are likely driving such bullish behaviour among investment institutions. With total assets now reaching almost $300 billion, a market capitalisation of $1.95 trillion, and solid current earnings, it is no wonder that the tech giant is one of the most closely watched stocks in the finance world. Whether or not Microsoft can continue to meet or exceed analyst projections will undoubtedly be a key issue to monitor over coming months.
Microsoft Receives Positive Feedback from Analysts and Investors
Microsoft Sees Positive Feedback from Analysts and Investors
Research analysts have recently weighed in on Microsoft’s stock, providing positive feedback with increased target prices. Morgan Stanley, Barclays, Wedbush, Sanford C. Bernstein, and TD Cowen raised their price expectations for Microsoft and gave the company “overweight” or “outperform” ratings. The current market capitalization of the company stands at $2.33 trillion with a P/E ratio of 34.00. As of Thursday, Microsoft had a fifty-two week low of $213.43 and a fifty-two week high of $322.72.
The tech giant has also been favored by institutional investors seeking to increase their stake in the firm’s earnings potential. DGS Capital Management LLC lifted its holdings by 19.9% during Q1 2021, while Altus Wealth Group LLC boosted its positions by 1.2%. Powell Investment Advisors LLC grew its holding by 16.2%, and Onyx Bridge Wealth Group LLC increased its stake by 8.2%. Currently, 69.15% of the stock is owned by institutional investors.
Microsoft announced that it will issue a quarterly dividend payout on June 8th for shareholders of record as of May 18th to receive a $0.68 dividend per share annually on an annualized basis; the current yield stands at 0.87%. The payout represents a dividend payout ratio (DPR) of 29.47%.
In other news related to executives’ dealings with the company’s shares, CEO Satya Nadella sold a total of 4,767 shares worth around $1,186,410 while CMO Christopher C.Caposella sold nearly $1,584M worth accounting for five thousand shares; both sales were disclosed in filings with SEC which can be accessed online through links provided above.
With increasing institutional investor confidence coupled with positive ratings from analysts and growing dividends, Microsoft seems to be thriving beautifully despite the challenges brought on by the pandemic. Only time will tell how double down efforts on innovation and expansion bear fruit for the Redmond based corporation in an ever-changing technological landscape.
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