Evercore Partners reaffirmed their overweight rating on shares of Microsoft Corp. (NASDAQ:MSFT) in a report released on Wednesday, American Banking News reports. Evercore Partners currently has a $45.00 price objective on the stock, up from their previous price objective of $38.00.
“Risk/reward at current levels remains attractive independent of ultimate CEO decision. While there are wide ranging opinions in terms of the ‘best’ choice for the next MSFT CEO, it is clear to us that the majority of investors would like to see Alan Mulally take on the role, with either Tony Bates or Satya Nadella groomed as his successor. This accomplishes two things: 1) it brings a true ‘outsider’ perspective to the business, and 2) provides some continuity when taking a 3-5 year view. However, if this proves not to be the Board’s decision, we believe the upside case for the stock remains intact as the next CEO: 1) will take over a growing commercial business, with two significant ‘cloud’ opportunities in Office 365 and Azure; 2) will have the opportunity to trim costs ($3.8bn in unallocated; $31.6bn expected in total op-ex); 3) will inherit a cash-generating machine with $81bn on the balance sheet; and 4) will take over a consumer business that is already viewed (and valued) as a lost cause, so almost ANY progress in market share or profitability could help drive upside. In our view, even incremental adjustments to the cost structure and continued growth in the commercial businesses are enough to keep the stock on an upward trajectory given Microsoft’s dividend yield (~3%) and valuation (13x CY15 EPS). So, while Mr. Mulally would likely create the most near-term lift in shares, we do not believe that the long-term risk/reward changes meaningfully if the Board goes in a different direction.,” Evercore Partners’ analyst wrote.
Microsoft Corp. (NASDAQ:MSFT) opened at 37.60 on Wednesday. Microsoft Corp. has a 52-week low of $26.26 and a 52-week high of $38.22. The stock’s 50-day moving average is $36.06 and its 200-day moving average is $34.1. The company has a market cap of $313.9 billion and a P/E ratio of 13.98.
Microsoft Corp. (NASDAQ:MSFT) last posted its quarterly earnings results on Thursday, October 24th. The company reported $0.62 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.55 by $0.07. The company had revenue of $18.53 billion for the quarter, compared to the consensus estimate of $17.83 billion. During the same quarter in the prior year, the company posted $0.65 earnings per share. The company’s quarterly revenue was up 15.7% on a year-over-year basis. On average, analysts predict that Microsoft Corp. will post $2.66 earnings per share for the current fiscal year.
The company also recently declared a quarterly dividend, which is scheduled for Thursday, March 13th. Shareholders of record on Thursday, February 20th will be given a dividend of $0.28 per share. This represents a $1.12 dividend on an annualized basis and a yield of 2.98%. The ex-dividend date of this dividend is Tuesday, February 18th.
In other Microsoft Corp. news, EVP Tami Reller unloaded 60,000 shares of Microsoft Corp. stock on the open market in a transaction that occurred on Friday, November 15th. The stock was sold at an average price of $37.81, for a total transaction of $2,268,600.00. Following the completion of the transaction, the executive vice president now directly owns 485,193 shares of the company’s stock, valued at approximately $18,345,147. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link.
Several other analysts have also recently commented on the stock. Analysts at TheStreet reiterated a buy rating on shares of Microsoft Corp. in a research note to investors on Wednesday. Separately, analysts at FBR Capital Markets raised their price target on shares of Microsoft Corp. from $32.00 to $38.00 in a research note to investors on Monday. They now have a market perform rating on the stock. Finally, analysts at UBS AG downgraded shares of Microsoft Corp. to a sell rating in a research note to investors on Thursday, November 21st. They now have a $37.23 price target on the stock, up previously from $36.00. Six research analysts have rated the stock with a sell rating, nineteen have given a hold rating and fourteen have assigned a buy rating to the stock. Microsoft Corp. has an average rating of Hold and an average price target of $35.21.
Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services.
Get Analysts' Upgrades and Downgrades via Email - Stay on top of analysts' coverage with Analyst Ratings Network's FREE daily email newsletter that provides a concise list of analysts' upgrades and downgrades. Click here to register now.