Scotiabank Has Negative Outlook of Microsoft FY2027 Earnings

Microsoft Corporation (NASDAQ:MSFT) – Analysts at Scotiabank dropped their FY2027 earnings per share estimates for shares of Microsoft in a research note issued to investors on Wednesday, July 29th. Scotiabank analyst P. Colville now expects that the software giant will post earnings per share of $19.05 for the year, down from their prior forecast of $19.49. Scotiabank currently has a “Outperform” rating on the stock. The consensus estimate for Microsoft’s current full-year earnings is $16.70 per share.

A number of other brokerages have also commented on MSFT. Piper Sandler raised their price objective on Microsoft from $540.00 to $550.00 and gave the stock an “overweight” rating in a research report on Tuesday. Cantor Fitzgerald reissued an “overweight” rating on shares of Microsoft in a research report on Monday. DZ Bank restated a “buy” rating on shares of Microsoft in a report on Thursday, April 30th. Stifel Nicolaus lowered their price objective on shares of Microsoft from $415.00 to $400.00 and set a “hold” rating on the stock in a research report on Thursday, June 25th. Finally, Dbs Bank dropped their price objective on shares of Microsoft from $678.00 to $573.00 in a research note on Thursday, May 7th. Forty-two analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat, Microsoft currently has a consensus rating of “Moderate Buy” and a consensus target price of $555.76.

Microsoft Trading Down 0.7%

NASDAQ MSFT opened at $390.54 on Thursday. Microsoft has a twelve month low of $349.20 and a twelve month high of $555.45. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The stock has a market cap of $2.90 trillion, a price-to-earnings ratio of 23.25, a PEG ratio of 1.20 and a beta of 1.13. The firm’s 50 day moving average price is $396.43 and its two-hundred day moving average price is $405.74.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The business had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. During the same quarter in the previous year, the business earned $3.65 earnings per share. The firm’s revenue was up 17.7% compared to the same quarter last year.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a $0.91 dividend. This represents a $3.64 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s payout ratio is currently 21.67%.

Insider Transactions at Microsoft

In other news, EVP Amy Coleman sold 1,262 shares of the stock in a transaction on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total transaction of $519,111.08. Following the transaction, the executive vice president owned 46,003 shares in the company, valued at $18,922,874.02. This represents a 2.67% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the firm’s stock in a transaction on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the transaction, the chief executive officer owned 110,477 shares in the company, valued at $50,928,792.23. This represents a 12.30% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 23,762 shares of company stock worth $10,508,361 in the last 90 days. 0.03% of the stock is owned by insiders.

Institutional Trading of Microsoft

Institutional investors and hedge funds have recently made changes to their positions in the stock. Platform Technology Partners grew its stake in Microsoft by 7.4% in the 2nd quarter. Platform Technology Partners now owns 45,761 shares of the software giant’s stock valued at $17,070,000 after buying an additional 3,167 shares during the last quarter. Financial Perspectives Inc lifted its position in Microsoft by 5.2% during the 2nd quarter. Financial Perspectives Inc now owns 35,154 shares of the software giant’s stock worth $13,113,000 after acquiring an additional 1,725 shares during the last quarter. MBE Wealth Management LLC boosted its holdings in Microsoft by 6.5% during the second quarter. MBE Wealth Management LLC now owns 3,600 shares of the software giant’s stock valued at $1,343,000 after acquiring an additional 220 shares during the period. SWP Financial LLC boosted its holdings in Microsoft by 33.4% during the second quarter. SWP Financial LLC now owns 1,030 shares of the software giant’s stock valued at $384,000 after acquiring an additional 258 shares during the period. Finally, Wealth Advisory Solutions LLC grew its position in shares of Microsoft by 20.5% in the second quarter. Wealth Advisory Solutions LLC now owns 23,516 shares of the software giant’s stock valued at $8,772,000 after purchasing an additional 3,994 shares during the last quarter. Institutional investors and hedge funds own 71.13% of the company’s stock.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings and cloud growth: Microsoft reported quarterly revenue of approximately $90.0 billion, up 17.7% year over year and above the $87.6 billion consensus estimate. Adjusted earnings per share of $4.74 also exceeded expectations of roughly $4.24. Azure revenue rose 43%, ahead of forecasts, and Azure surpassed $100 billion in annual revenue. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: AI monetization is gaining traction: Microsoft said Copilot exceeded 30 million paid seats, while growing Azure and Microsoft 365 usage suggested that AI demand is translating into higher cloud consumption and subscription revenue. Management also highlighted expanding AI capacity and a large commercial backlog. Meta tanks, Microsoft jumps as the AI trade splits Big Tech
• Positive Sentiment: Capital-spending concerns eased: Microsoft kept its AI capital-expenditure outlook broadly unchanged, unlike Alphabet’s recent upward revision, and emphasized that GPU spending can be moderated if demand cools. The company is also extending data-center lifespans to reduce buildout costs. Goldman Sachs raised its Microsoft price target to $640, while Citizens JMP reiterated its Market Outperform rating. Microsoft keeps capex forecast unchanged
• Neutral Sentiment: Key issue remains AI returns: Microsoft continues to spend heavily on data centers and AI infrastructure, so investors will monitor margins, free cash flow and the pace at which Copilot converts users into profitable consumption. The company’s first-quarter fiscal 2027 revenue guidance of $89.9 billion to $91.0 billion was slightly above consensus. Microsoft beats Wall Street expectations
• Negative Sentiment: Regulatory and competitive risks persist: U.K. regulators are investigating Microsoft’s Microsoft 365 subscription marketing, while Disney reportedly plans to replace GitHub Copilot with OpenAI’s Codex. These developments are unlikely to outweigh the earnings strength today but could pressure monetization and reputation over time. UK investigates Microsoft over 365 subscriptions

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).