TLDR
- Citigroup lowered Microsoft’s price target from $690 to $660 but maintained a “buy” rating, suggesting 46.86% upside potential
- Microsoft reported strong earnings with EPS of $4.13 versus $3.65 expected and revenue of $77.67 billion, up 18.4% year-over-year
- Stock traded between $439 and $456, below its 200-day moving average of $502.15 as concerns about Azure cloud growth weigh on shares
- Analyst consensus remains bullish with 40 buy ratings and only 3 holds, average price target of $626.90
- Next earnings report on January 28 is the key catalyst, with investors focused on Azure growth and AI monetization strategy
Citigroup analysts reduced their price target on Microsoft from $690 to $660 on Wednesday while keeping their “buy” rating intact. The new target represents potential upside of 46.86% from current levels.
The cut comes as Microsoft shares trade at $449.42, down from recent highs. The stock opened Wednesday near the lower end of its trading range.
Trading volume reached roughly 19.6 million shares, below the average daily volume of 24.9 million. The lighter volume suggests no panic selling or extreme enthusiasm in the current session.
Earnings Beat Expectations Despite Stock Pressure
Microsoft delivered solid results in its most recent quarter. The company reported earnings per share of $4.13, beating the consensus estimate of $3.65 by $0.48.
Revenue came in at $77.67 billion, exceeding analyst expectations of $75.49 billion. That represents 18.4% growth compared to the same period last year.
The company’s return on equity stood at 32.45% with a net margin of 35.71%. Microsoft earned $3.30 per share in the prior year period.
Despite the strong numbers, the stock has faced pressure. Shares are trading below both the 50-day moving average of $481.96 and the 200-day moving average of $502.15.
The stock’s 52-week range spans from $344.79 to $555.45. Current trading puts Microsoft closer to the middle of that range.
Wall Street Maintains Bullish Stance
Analyst sentiment remains largely positive across the board. Three analysts rate the stock as a Strong Buy, while 37 have assigned Buy ratings.
Only three analysts maintain Hold ratings. No analysts currently rate Microsoft as a sell.
The average price target across all analysts sits at $626.90. That’s about 39% above current trading levels.
KeyCorp reiterated an “overweight” rating on the shares. UBS Group maintained a “buy” rating with a $650 price target.
Robert W. Baird initiated coverage with an “outperform” rating and $600 price target. Rothschild & Co Redburn took a more cautious stance with a “neutral” rating and $500 target.
Institutional investors control 71.13% of the company’s stock. Recent filings show mixed activity with some funds adding shares and others trimming positions.
Bradford L. Smith sold 38,500 shares at an average price of $518.64 in early November. CEO Judson Althoff sold 12,750 shares at $491.52 in early December.
Insiders collectively sold 54,100 shares worth approximately $27.6 million over the past three months. Insider ownership now stands at just 0.03% of total shares.
The company maintains a market capitalization of $3.34 trillion. Microsoft trades at a price-to-earnings ratio of 31.94 with a P/E/G ratio of 1.72.
The balance sheet shows a current ratio of 1.40 and a quick ratio of 1.39. The debt-to-equity ratio sits at a low 0.10.
Analysts project Microsoft will post $13.08 in earnings per share for the current fiscal year. The January 28 earnings report will provide the next major data point for investors watching Azure cloud growth and AI spending returns.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
