Technology

Why Analysts Think Microsoft Is a Screaming Buy After Earnings

Microsoft Corp. (NASDAQ: MSFT) released fiscal second-quarter financial results after markets closed Tuesday. The firm said that it had $2.03 in earnings per share (EPS) and $43.1 billion in revenue, which compared with consensus estimates of $1.64 in EPS and revenue of $40.18 billion. The same period of last year reportedly had EPS of $1.51 on $36.9 billion in revenue.

Apart from these results, analysts were fairly positive on the tech giant in their calls on Wednesday. We have included some of the highlights from the earnings report, as well as what these analysts said after the fact.

In terms of its segments, the company reported as follows:

  • Revenue in Productivity and Business Processes was $13.4 billion and increased 13% (up 11% in constant currency).
  • Revenue in Intelligent Cloud was $14.6 billion and increased 23% (up 22% in constant currency).
  • Revenue in More Personal Computing was $15.1 billion and increased 14% (up 13% in constant currency).

Microsoft returned $10 billion to shareholders in the form of share repurchases and dividends in the quarter, an increase of 18% year over year.

On the books, Microsoft’s cash, cash equivalents and short-term investments totaled $131.97 billion at the end of the quarter, down from $136.53 billion at the end of fiscal 2020.

Here’s what analysts had to say:

  • UBS reiterated a Buy rating and raised its price target to $267 from $243.
  • Credit Suisse reiterated it as Outperform and raised its target to $265 from $235.
  • Oppenheimer reiterated it as Outperform and lifted its target to $275 from $260.
  • Cowen reiterated an Outperform rating and raised its target to $280 from $245.
  • Wedbush reiterated it as Outperform and raised its price target to $285 from $270.
  • Morgan Stanley reiterated it as Overweight and raised its target to $285 from $260.
  • RBC reiterated its Outperform rating and raised its target price to $290 from $250.
  • Barclays reiterated an Overweight rating and raised its price target to $269 from $250.
  • BMO Capital Markets reiterated it as Outperform and raised its target to $270 from $245.
  • Mizuho reiterated a Buy rating and raised its price target to $270 from $255.
  • Piper Sandler reiterated it as Overweight and raised its price to $300 from $245.

Microsoft stock traded up about 3% to $239.59 Wednesday morning, in a 52-week range of $132.52 to $239.80. The consensus price target is $244.25.