Zacks Investment Research Downgrades Microsoft (MSFT) to Hold

Zacks Investment Research downgraded shares of Microsoft (NASDAQ:MSFT) from a buy rating to a hold rating in a report issued on Wednesday.

According to Zacks, “Microsoft shares have outperformed the industry it belongs to over the past one year. We expect rapid adoption of Azure and Office 365 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, Red Hat, Symantec, Cray and PAREXEL are positive for the company's growth prospects. We also believe that Microsoft’s strategic initiatives to enter the augmented reality and virtual reality market with the acquisition of Altspace VR and launch of mixed reality headsets will be positives. Additionally, Microsoft’s recent blockchain deals with Hapoalim and Accenture and its Coco framework are tailwinds. However, intense competition from Sony’s PS4 is a headwind. Additionally, declining PC shipments doesn't bode well for the company.”

Other equities analysts also recently issued reports about the stock. Credit Suisse Group reiterated a buy rating and set a $95.00 price target on shares of Microsoft in a report on Friday, October 27th. Morgan Stanley set a $88.00 price objective on shares of Microsoft and gave the company a buy rating in a research report on Friday, October 27th. Tigress Financial reissued a buy rating on shares of Microsoft in a research report on Tuesday, November 7th. Vetr raised shares of Microsoft from a sell rating to a hold rating and set a $82.07 price objective for the company in a research report on Tuesday, October 31st. Finally, Royal Bank of Canada reissued a buy rating on shares of Microsoft in a research report on Friday, September 8th. Two analysts have rated the stock with a sell rating, eight have assigned a hold rating and thirty-two have issued a buy rating to the company’s stock. The company presently has a consensus rating of Buy and an average price target of $85.90.

Shares of Microsoft (MSFT) traded up $1.08 during trading hours on Wednesday, reaching $88.19. 22,696,400 shares of the company traded hands, compared to its average volume of 22,960,000. The company has a market cap of $680,350.00, a P/E ratio of 29.79, a price-to-earnings-growth ratio of 2.06 and a beta of 0.99. Microsoft has a one year low of $61.95 and a one year high of $88.41. The company has a debt-to-equity ratio of 0.91, a current ratio of 3.12 and a quick ratio of 3.06.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Thursday, October 26th. The software giant reported $0.84 EPS for the quarter, beating the consensus estimate of $0.72 by $0.12. The company had revenue of $24.50 billion for the quarter, compared to the consensus estimate of $23.57 billion. Microsoft had a net margin of 24.56% and a return on equity of 35.23%. The firm’s revenue was up 11.7% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.76 EPS. analysts predict that Microsoft will post 3.38 earnings per share for the current fiscal year.

The firm also recently declared a quarterly dividend, which will be paid on Thursday, March 8th. Stockholders of record on Thursday, February 15th will be given a $0.42 dividend. The ex-dividend date is Wednesday, February 14th. This represents a $1.68 annualized dividend and a dividend yield of 1.90%. Microsoft’s payout ratio is presently 56.76%.

In related news, EVP Christopher C. Capossela sold 4,000 shares of the business’s stock in a transaction that occurred on Friday, November 10th. The shares were sold at an average price of $83.46, for a total transaction of $333,840.00. Following the completion of the transaction, the executive vice president now owns 189,278 shares in the company, valued at approximately $15,797,141.88. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Frank H. Brod sold 15,000 shares of the business’s stock in a transaction that occurred on Thursday, November 2nd. The stock was sold at an average price of $84.08, for a total transaction of $1,261,200.00. Following the transaction, the insider now owns 116,205 shares of the company’s stock, valued at approximately $9,770,516.40. The disclosure for this sale can be found here. Insiders sold a total of 45,000 shares of company stock valued at $3,759,420 in the last ninety days. Corporate insiders own 1.49% of the company’s stock.

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Acrospire Investment Management LLC increased its stake in Microsoft by 300.0% during the 2nd quarter. Acrospire Investment Management LLC now owns 1,600 shares of the software giant’s stock valued at $110,000 after purchasing an additional 1,200 shares in the last quarter. Hefty Wealth Partners increased its stake in Microsoft by 65.6% during the 2nd quarter. Hefty Wealth Partners now owns 1,648 shares of the software giant’s stock valued at $113,000 after purchasing an additional 653 shares in the last quarter. Stelac Advisory Services LLC increased its stake in Microsoft by 23.5% during the 2nd quarter. Stelac Advisory Services LLC now owns 2,033 shares of the software giant’s stock valued at $140,000 after purchasing an additional 387 shares in the last quarter. Pacific Center for Financial Services increased its stake in shares of Microsoft by 3.0% in the second quarter. Pacific Center for Financial Services now owns 2,572 shares of the software giant’s stock worth $177,000 after acquiring an additional 75 shares during the period. Finally, AlphaMark Advisors LLC increased its stake in shares of Microsoft by 1.1% in the second quarter. AlphaMark Advisors LLC now owns 2,677 shares of the software giant’s stock worth $185,000 after acquiring an additional 30 shares during the period. Hedge funds and other institutional investors own 73.16% of the company’s stock.

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About Microsoft

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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