Microsoft (NASDAQ:MSFT) Stock Price Down 0.6% After Analyst Downgrade

Microsoft Co. (NASDAQ:MSFT) saw its stock price decrease by 0.6% during mid-day trading on Monday. This decline followed a downgrade from Piper Sandler, which reduced its price target for Microsoft from $485.00 to $470.00. Despite this adjustment, Piper Sandler continues to hold an overweight rating on the stock. During trading, Microsoft shares reached a low of $415.65 before closing at $415.77. A total of 2,911,875 shares were exchanged, marking an 86% decline from the typical session volume of 20,213,559 shares. Previously, the stock had closed at $418.16.

In addition to Piper Sandler, several other analysts have also recently shared their insights on Microsoft’s stock. Argus raised its price target from $475.00 to $526.00 on July 9th, offering a "buy" rating. Similarly, Goldman Sachs lowered its target from $515.00 to $500.00 while assigning a "buy" rating on October 10th. DA Davidson downgraded Microsoft from a "buy" to a "neutral" rating, setting a target price of $475.00 on September 23rd. KeyCorp increased its price target from $490.00 to $505.00 and maintained an "overweight" rating as of October 18th. Truist Financial also reiterated a "buy" rating, assigning a target price of $600.00 on October 8th. Currently, one research analyst has issued a sell rating, three analysts have a hold rating, while twenty-eight analysts have given a buy rating. According to MarketBeat data, Microsoft has an average rating of "Moderate Buy" and a consensus price target of $495.68.

Insider Transactions at Microsoft

In recent company news, insider Bradford L. Smith sold 40,000 shares of Microsoft on September 9th at an average price of $402.59, totaling approximately $16,103,600. Following this sale, he holds 544,847 shares valued at around $219,349,953.73. This transaction represented no change in his ownership percentage. Additionally, EVP Kathleen T. Hogan sold 17,378 shares on September 10th, receiving around $7,157,129.30 at an average price of $411.85. Post-sale, she retains ownership of 150,161 shares, estimated to be worth $61,843,807.85. Insiders have sold a combined 190,629 shares valued at $77,916,485 over the last three months, with insiders only owning 0.03% of the company’s stock.

Institutional Trading of Microsoft

Multiple hedge funds and institutional investors have conducted adjustments to their holdings in Microsoft recently. Vanguard Group Inc. increased its stake by 0.5% during the first quarter, acquiring an additional 3,078,099 shares and holding 667,987,038 shares worth approximately $281 billion. Capital International Investors raised its position by 1.0%, now owning 83,571,070 shares valued at $35 billion after purchasing 842,884 additional shares. International Assets Investment Management LLC has massively increased its holdings by nearly 48,526.1% this quarter, acquiring 38,501,645 shares worth around $16.5 billion. Ameriprise Financial Inc. enhanced its stake by 0.3% during the second quarter, with their total shares standing at 34,511,544, worth approximately $15.4 billion after an additional purchase. Dimensional Fund Advisors LP also improved its position by 6.9%, now holding 24,091,789 shares valued at roughly $10.8 billion. Overall, institutional investors control about 71.13% of Microsoft’s stock.

Microsoft Price Performance

The company maintains a debt-to-equity ratio of 0.16, with both a quick ratio and current ratio of 1.27. Microsoft holds a market capitalization of $3.18 trillion, a PE ratio of 37.01, and a price-to-earnings-growth ratio of 2.22 alongside a beta of 0.90. The stock's 50-day moving average is $420.17, while the 200-day moving average is $424.56.

Microsoft recently reported its quarterly earnings on July 30th, showing an earnings per share (EPS) of $2.95, which surpassed analysts’ expectations of $2.90 by $0.05. Its revenue for the quarter was $64.73 billion, narrowly exceeding the consensus estimate of $64.38 billion, marking a 15.2% increase year-over-year from the previous year's revenue. Analysts project Microsoft will have an EPS of 13.02 for the current year.

Microsoft Increases Dividend

The company has announced a quarterly dividend of $0.83 per share, which will be payable on December 12th to stockholders of record as of November 21st. This announcement shows an increase from the earlier dividend of $0.75 and reflects an annualized dividend of $3.32 with a yield of 0.78%. The dividend payout ratio stands at 28.74%.

Moreover, Microsoft’s Board of Directors has authorized a stock repurchase program that permits the company to buy back $60 billion in shares, equivalent to approximately 1.9% of its stock in the open market. This move usually suggests that the board believes the company's shares are undervalued.

Microsoft Company Profile

Microsoft Corporation is renowned for developing and supporting software, services, devices, and solutions globally. Their offerings include products such as Office, Exchange, SharePoint, Microsoft Teams, and various consumer subscription services under Microsoft 365.

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