We are in the midst of an earnings season which has been a decent one thus far for many tech companies. After the market closes today Microsoft Corporation (NASDAQ:MSFT) will themselves be announcing earnings for their fiscal second quarter. Shares of the company are already trading higher as investors bet on an earnings beat. To do that Microsoft Corporation (NASDAQ:MSFT) will need to report earnings per share in excess of $0.71 for the quarter, on revenue of around $25.2 billion. Over the last five quarters the company has beat estimates.
Although the stock is already trading at a PE ratio of over 34, continued earnings growth should be enough to warrant this high PE. An earnings miss could warrant quite a sell-off. It will be interesting to see how the stock reacts after hours today following the report.The stock is up 1.05% or $0.54 following the news, hitting $51.76 per share. About 30.68M shares traded hands. MSFT has risen 11.57% since June 23, 2015 and is uptrending. It has outperformed the S&P500 by 20.43%.
From a total of 18 analysts covering Microsoft Corporation (NASDAQ:MSFT) stock, 14 rate it a “Buy”, 1 a “Sell”, and 3 a “Hold”. This means that 78% of the ratings are positive. The highest target price is $66 while the lowest target price is $20. The mean of all analyst targets is $54.87 which is 6.01% above today’s ($51.76) stock price. Microsoft Corporation was the topic of 36 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. Morgan Stanley upgraded shares on January 13 to a “Overweight” rating. Vetr upgraded shares to a”Strong-Buy” rating and a $47.60 target share price in their report from a September 2. Barclays Capital maintained MSFT stock in a recent report from January 6 with a “Overweight” rating. Global Equities Research maintained the rating on August 28. Global Equities Research has a “Overweight” rating and a $50 price target on shares. Finally, Goldman Sachs upgraded the stock to a “Neutral” rating in a report they issued on a December 18.
The institutional sentiment increased to 1.08 in Q2 2015. It’s up 0.32, from 0.76 in 2015Q2. The ratio improved, as 69 funds sold all their Microsoft Corporation shares they owned while 801 reduced their positions. 93 funds bought stakes while 843 increased their total positions. Institutions now own 5.20 billion shares which is 8.27% less than the previous share count of 5.67 billion in 2015Q2.
Cook & Bynum Capital Management Llc holds 25.5% of its total portfolio in Microsoft Corporation, equating to 717,081 shares. Rwwm Inc. owns 895,414 shares representing 19.69% of their total US portfolio. Moreover, Valueact Holdings L.P. has 19.37% of their total portfolio invested in the company, equating to 75.27 million shares. The California-based Smithwood Advisers L.P. has a total of 17.28% of their portfolio invested in the stock. Deccan Value Investors L.P., a Connecticut-based fund reported 2.26 million shares owned.
Microsoft Corporation is engaged in developing, licensing and supporting a range of software services and products. The company has a market cap of $409.22 billion. The Firm also creates and sells hardware, and delivers online advertising to the customers. It has 34.78 P/E ratio. The Firm operates in five divisions: Devices and Consumer Licensing, D&C Hardware, D&C Other, Commercial Licensing, and Commercial Other.