Zacks Investment Research Lowers Microsoft Corporation (MSFT) to Hold

Zacks Investment Research cut shares of Microsoft Corporation (NASDAQ:MSFT) from a buy rating to a hold rating in a report released on Friday morning.

According to Zacks, “Microsoft reported impressive first-quarter fiscal 2018 results driven by rapid adoption of Azure and Office 365. We expect these to remain the key catalysts in the near future. This along with lower spending will drive operating margin expansion in fiscal 2018. We believe that collaborations with the likes of Amazon.com, Red Hat, Symantec, Cray and PAREXEL are positive for the company's growth prospects. Microsoft recently launched Xbox One X with a strong game line-up. Considering the record pre-orders, we believe that the latest console has significant growth potential. However, intense competition from Sony’s PS4 is a major headwind. Additionally, declining PC shipments doesn't bode well for the company. Microsoft has underperformed the industry it belongs to on a year-to-date basis.”

A number of other brokerages have also recently commented on MSFT. Sanford C. Bernstein set a $87.00 target price on shares of Microsoft Corporation and gave the company a buy rating in a report on Friday, July 21st. Canaccord Genuity restated a hold rating and set a $76.00 target price on shares of Microsoft Corporation in a report on Friday, September 15th. Royal Bank Of Canada restated an outperform rating and set a $88.00 target price (up previously from $85.00) on shares of Microsoft Corporation in a report on Friday, October 27th. Evercore ISI restated a buy rating and set a $80.00 target price on shares of Microsoft Corporation in a report on Friday, August 18th. Finally, UBS AG set a $105.00 target price on shares of Microsoft Corporation and gave the company a buy rating in a report on Thursday. Two investment analysts have rated the stock with a sell rating, eleven have given a hold rating and twenty-nine have given a buy rating to the company. Microsoft Corporation has an average rating of Buy and a consensus target price of $83.64.

Shares of Microsoft Corporation (NASDAQ MSFT) traded down $0.22 during trading on Friday, reaching $83.87. 19,397,700 shares of the company’s stock were exchanged, compared to its average volume of 23,069,730. The company has a current ratio of 3.12, a quick ratio of 3.06 and a debt-to-equity ratio of 0.91. The stock has a market cap of $647,022.69, a P/E ratio of 24.81, a P/E/G ratio of 1.96 and a beta of 1.01. Microsoft Corporation has a fifty-two week low of $57.28 and a fifty-two week high of $86.20.

Microsoft Corporation (NASDAQ:MSFT) last issued its quarterly earnings data on Thursday, October 26th. The software giant reported $0.84 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.72 by $0.12. The business had revenue of $24.50 billion for the quarter, compared to the consensus estimate of $23.57 billion. Microsoft Corporation had a net margin of 24.56% and a return on equity of 35.23%. The company’s quarterly revenue was up 11.7% compared to the same quarter last year. During the same period in the previous year, the firm earned $0.76 EPS. sell-side analysts expect that Microsoft Corporation will post 3.37 EPS for the current fiscal year.

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The business also recently declared a quarterly dividend, which will be paid on Thursday, December 14th. Investors of record on Thursday, November 16th will be given a $0.42 dividend. The ex-dividend date of this dividend is Wednesday, November 15th. This is an increase from Microsoft Corporation’s previous quarterly dividend of $0.39. This represents a $1.68 dividend on an annualized basis and a yield of 2.00%. Microsoft Corporation’s dividend payout ratio (DPR) is currently 53.06%.

In other Microsoft Corporation news, CFO Amy Hood sold 55,000 shares of the stock in a transaction on Tuesday, August 29th. The stock was sold at an average price of $72.71, for a total value of $3,999,050.00. Following the sale, the chief financial officer now owns 510,217 shares in the company, valued at $37,097,878.07. The transaction was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Also, EVP Christopher C. Capossela sold 4,000 shares of the stock in a transaction on Friday, November 10th. The stock was sold at an average price of $83.46, for a total value of $333,840.00. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 100,763 shares of company stock valued at $7,574,552. 1.49% of the stock is owned by corporate insiders.

Hedge funds have recently added to or reduced their stakes in the business. Appropriate Balance Financial Services Inc. increased its stake in Microsoft Corporation by 4.7% in the second quarter. Appropriate Balance Financial Services Inc. now owns 643 shares of the software giant’s stock worth $9,331,000 after purchasing an additional 29 shares during the period. Acrospire Investment Management LLC increased its stake in Microsoft Corporation by 300.0% in the second quarter. Acrospire Investment Management LLC now owns 1,600 shares of the software giant’s stock worth $110,000 after purchasing an additional 1,200 shares during the period. Hefty Wealth Partners increased its stake in Microsoft Corporation by 65.6% in the second quarter. Hefty Wealth Partners now owns 1,648 shares of the software giant’s stock worth $113,000 after purchasing an additional 653 shares during the period. Ullmann Financial Group Inc. purchased a new stake in Microsoft Corporation in the first quarter worth $132,000. Finally, Stelac Advisory Services LLC increased its stake in Microsoft Corporation by 23.5% in the second quarter. Stelac Advisory Services LLC now owns 2,033 shares of the software giant’s stock worth $140,000 after purchasing an additional 387 shares during the period. Institutional investors and hedge funds own 73.37% of the company’s stock.

About Microsoft Corporation

Microsoft Corporation is a technology company. The Company develops, licenses, and supports a range of software products, services and devices. The Company’s segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company’s products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers.

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