Microsoft (MSFT) Downgraded to “Hold” at Zacks Investment Research

Zacks Investment Research lowered shares of Microsoft (NASDAQ:MSFT) from a buy rating to a hold rating in a research report report published 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.”

Several other equities research analysts have also recently weighed in on the stock. ValuEngine upgraded shares of Microsoft from a hold rating to a buy rating in a research report on Wednesday, September 6th. Morningstar restated a neutral rating on shares of Microsoft in a research report on Monday, October 16th. Evercore ISI raised their price objective on shares of Microsoft from $93.00 to $106.00 and gave the company an outperform rating in a research report on Friday, December 8th. UBS Group set a $105.00 price objective on shares of Microsoft and gave the company a buy rating in a research report on Thursday, November 9th. Finally, Royal Bank of Canada restated an outperform rating and issued a $88.00 price objective (up previously from $85.00) on shares of Microsoft in a research report on Friday, October 27th. Two research analysts have rated the stock with a sell rating, nine have assigned a hold rating and thirty-one have assigned a buy rating to the company. The company currently has a consensus rating of Buy and an average target price of $85.87.

Shares of Microsoft (NASDAQ:MSFT) traded up $0.76 during trading on Wednesday, hitting $87.11. 21,179,500 shares of the company were exchanged, compared to its average volume of 22,700,000. The firm has a market cap of $672,020.00, a PE ratio of 29.43, a P/E/G ratio of 2.00 and a beta of 0.99. The company has a quick ratio of 3.06, a current ratio of 3.12 and a debt-to-equity ratio of 0.91. Microsoft has a 1-year low of $61.95 and a 1-year high of $87.66.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Thursday, October 26th. The software giant reported $0.84 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.72 by $0.12. The business had revenue of $24.50 billion during the quarter, compared to analysts’ expectations of $23.57 billion. Microsoft had a net margin of 24.56% and a return on equity of 35.23%. The firm’s revenue for the quarter was up 11.7% on a year-over-year basis. During the same quarter last year, the company posted $0.76 EPS. equities analysts predict that Microsoft will post 3.38 EPS for the current year.

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, March 8th. Investors of record on Thursday, February 15th will be paid a dividend of $0.42 per share. This represents a $1.68 annualized dividend and a yield of 1.93%. The ex-dividend date is Wednesday, February 14th. Microsoft’s payout ratio is 56.76%.

In related news, insider Frank H. Brod sold 15,000 shares of Microsoft stock in a transaction that occurred on Thursday, November 2nd. The shares were 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 transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP Christopher C. Capossela sold 4,000 shares of Microsoft stock in a transaction that occurred on Tuesday, November 14th. The stock was sold at an average price of $83.48, for a total transaction of $333,920.00. Following the transaction, the executive vice president now directly owns 185,278 shares in the company, valued at approximately $15,467,007.44. The disclosure for this sale can be found here. Insiders have sold a total of 45,000 shares of company stock worth $3,759,420 in the last three months. 1.49% of the stock is owned by insiders.

A number of institutional investors have recently added to or reduced their stakes in MSFT. New Capital Management LP raised its holdings in shares of Microsoft by 0.5% in the first quarter. New Capital Management LP now owns 4,305 shares of the software giant’s stock valued at $284,000 after purchasing an additional 22 shares during the last quarter. Nottingham Advisors Inc. raised its holdings in shares of Microsoft by 0.4% in the second quarter. Nottingham Advisors Inc. now owns 5,399 shares of the software giant’s stock valued at $372,000 after purchasing an additional 22 shares during the last quarter. American Economic Planning Group Inc. ADV raised its holdings in shares of Microsoft by 0.5% in the second quarter. American Economic Planning Group Inc. ADV now owns 4,939 shares of the software giant’s stock valued at $340,000 after purchasing an additional 23 shares during the last quarter. Carderock Capital Management Inc. raised its holdings in shares of Microsoft by 0.7% in the second quarter. Carderock Capital Management Inc. now owns 3,981 shares of the software giant’s stock valued at $274,000 after purchasing an additional 26 shares during the last quarter. Finally, Appropriate Balance Financial Services Inc. raised its holdings in shares of Microsoft by 4.7% in the second quarter. Appropriate Balance Financial Services Inc. now owns 643 shares of the software giant’s stock valued at $9,331,000 after purchasing an additional 29 shares during the last quarter. 73.16% of the stock is currently owned by institutional investors and hedge funds.

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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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