Microsoft Corporation Stock Forecast:
According to Microsoft Corporation stock predictions from 37 analysts, the average target price for the company over the next year is $285.37. The average analyst rating is considered a “Strong Buy.” Stock Target Advisor has a bullish analysis of Microsoft, based on 10 positive indicators and 4 negative indicators. Microsoft’s stock price was $267.56 at the close of the last trading day. In the past week, the stock price has increased by 7.97%, gone up by 18.95% in the past month, but declined by 11.09% in the last year.
Microsoft News:
Microsoft (MSFT:NSD) announced on Tuesday that it will incorporate the technology behind ChatGPT into its Bing search engine and Edge web browser.
The move led to an increase in Microsoft stock, as investors hope that the AI tool will help Bing compete with Google in the search market. The integration is part of Microsoft’s AI strategy following its massive investment in OpenAI.
CEO Satya Nadella stated that the Bing upgrade will allow for a new type of search where people can ask questions using natural language and receive direct answers. Additionally, Bing’s application of AI will have access to real-time information like news and train schedules, which ChatGPT currently lacks. Nadella emphasized that AI will have a major impact on all software categories, starting with search. As such, Microsoft has launched Bing and Edge powered by AI copilot and chat to enhance search and web experiences.
Analysts Coverage Change:
- Piper Jaffray Companies maintains “Overweight” rating and raises the price target to USD 290 from USD 247 on (MSFT:NSD)
- Jefferies & Company maintains “Buy” rating and raises the price target to USD 310 from USD 275
- Mizuho Securities maintains “Buy” rating and raises the price target to USD 300 from USD 280
- Oppenheimer & Co. maintains “Outperform” rating and raises the price target to USD 280 from USD 265
Positive Fundamentals:
Microsoft Corporation stock is considered a desirable investment opportunity due to several factors. Firstly, the company has a high market capitalization, making it one of the largest entities in its sector and in the top quartile. This often indicates stability for investors. Secondly, the stock has performed well in terms of risk-adjusted returns and has outperformed its sector peers, placing it in the top quartile. Additionally, the stock has shown low volatility, with stable and consistent annual returns compared to its peers.
In terms of dividend returns, the stock has also outperformed its sector peers on average annual dividend returns in the past 5 years, making it a good option for investors seeking high income yields. The company management has delivered superior returns on equity, invested capital, and assets in the most recent 4 quarters, placing it in the top quartile.
The company has also demonstrated positive cash flow and free cash flow in the most recent four quarters. Finally, the stock has shown top quartile earnings growth in the previous 5 years compared to its sector.
Negative Fundamentals:
Microsoft Corp. stock has underperformed its peers in terms of average total returns over the past 5 years. It is also considered overpriced compared to its peers in terms of book value, cash flow, and free cash flow. The stock is trading above the median for its sectors on these metrics, which suggests caution for those considering buying the stock.
FA Score (Fundamental Analysis):
The fundamental analysis of Microsoft Corporation is “Bullish” with a FA score of 7.1 out of 10, where 0 is very bearish and 10 is very bullish.
