Microsoft (NASDAQ:MSFT) Stock Price Down 1.2% - What's Next?

Microsoft Corporation (NASDAQ:MSFT) experienced a decrease of 1.2% in its stock price during mid-day trading on Thursday. The stock reached a low of $422.02 before closing at $422.99. During the trading session, a total of 18,279,258 shares exchanged hands, which is a drop of 11% compared to the average daily volume of 20,576,088 shares. The previous close for the stock was $427.99.

Recent Analyst Ratings

Various analysts have expressed their views on Microsoft stock in recent weeks. The Royal Bank of Canada reaffirmed an "outperform" rating with a price target set at $500.00 in a note released on November 5th. Similarly, KeyCorp increased their price target from $490.00 to $505.00, while maintaining an "overweight" rating as of October 18th. In contrast, JPMorgan Chase & Co. revised their target down from $470.00 to $465.00, keeping an "overweight" rating as of October 31st. Furthermore, Sanford C. Bernstein lower their target from $501.00 to $500.00 with an "outperform" rating on October 25th. UBS Group also adjusted their target from $510.00 to $500.00 while recommending a "buy" rating on October 31st. Overall, three analysts rated Microsoft with a hold recommendation, while twenty-seven analysts recommended to buy, leading to a consensus rating of "Moderate Buy" and an average price target of $503.03 according to MarketBeat.com.

Microsoft's Recent Performance

The company has reached a market capitalization of $3.14 trillion. Its P/E ratio stands at 34.90, while the PEG ratio is reported at 2.22, indicating the anticipated growth of earnings relative to its valuation. Microsoft has a beta of 0.91, showing its relatively lower volatility compared to the market. The stock's 50-day moving average is $421.39, and its 200-day moving average is $426.42. The debt-to-equity ratio is 0.15, while its quick ratio and current ratio are 1.29 and 1.30, respectively.

On October 30th, Microsoft reported its quarterly earnings, achieving an EPS of $3.30, which surpassed analysts' expectations of $3.10 by $0.20. The company generated revenues of $65.59 billion during the quarter, exceeding the predictions of $64.57 billion. This indicates a significant year-over-year growth, as it marked a 16.0% increase compared to the same quarter of the previous year when Microsoft reported an EPS of $2.99. Analysts expect Microsoft to deliver an EPS of 12.93 for the current fiscal year.

Dividend Increase and Buyback Plans

In an announcement related to shareholder returns, Microsoft declared a quarterly dividend of $0.83, set to be paid on December 12th to shareholders of record as of November 21st. This dividend marks an increase from the prior $0.75 per share, resulting in an annualized dividend of $3.32 and a yield of 0.78%. The current payout ratio is 27.39%.

Moreover, Microsoft revealed on September 16th its Board of Directors approved a $60 billion share buyback plan. This indicates the Board's confidence in the company's stock valuation, as such plans typically suggest the belief that a company’s shares are undervalued.

Insider Transactions

Regarding insider activity, Bradford L. Smith, an insider, sold 40,000 shares on September 9th at an average price of $402.59, totaling around $16.1 million. Following this transaction, Smith holds 544,847 shares valued at approximately $219.3 million. Additionally, CEO Satya Nadella sold 78,353 shares on September 4th for about $32 million. After these sales, Nadella retains 864,327 shares worth around $353.2 million. In total, insiders have sold about 209,431 shares valued at approximately $85.8 million over the last ninety days, with corporate insiders owning just 0.03% of the company's stock.

Institutional Investor Activity

Recently, several hedge funds and institutional investors have adjusted their positions in Microsoft. Rebalance LLC raised its stake by 0.7% and now owns 3,451 shares valued at $1.54 million after acquiring more shares in the second quarter. First National Bank Sioux Falls also increased its holdings by 0.4% to own 6,340 shares worth $2.83 million. BCK Partners boosted its investment by 1.8% in the third quarter, acquiring 1,353 shares valued at $582,000. Additionally, Doheny Asset Management CA and Flagship Private Wealth LLC saw a slight increase in their positions as well. Overall, approximately 71.13% of Microsoft stock is owned by institutional investors and hedge funds.

About Microsoft

Microsoft Corporation is a prominent technology company that develops software, services, devices, and solutions worldwide. Their Productivity and Business Processes segment includes popular products and services like Microsoft Teams, Office 365, and various data protection solutions.

Microsoft, Stock, Trading