Microsoft (NASDAQ:MSFT) Trading Down 2% – Should You Sell?

Microsoft Co. (NASDAQ:MSFT) fell 2% on Friday . The company traded as low as $427.36 and last traded at $429.14. 4,413,087 shares changed hands during mid-day trading, a decline of 79% from the average session volume of 20,591,373 shares. The stock had previously closed at $438.11.

Wall Street Analysts Forecast Growth

Several analysts recently commented on MSFT shares. JPMorgan Chase & Co. cut their target price on shares of Microsoft from $470.00 to $465.00 and set an “overweight” rating for the company in a research note on Thursday, October 31st. The Goldman Sachs Group cut their price objective on Microsoft from $515.00 to $500.00 and set a “buy” rating for the company in a research report on Thursday, October 10th. StockNews.com cut Microsoft from a “buy” rating to a “hold” rating in a report on Friday, December 20th. Stifel Nicolaus boosted their target price on Microsoft from $475.00 to $515.00 and gave the stock a “buy” rating in a research report on Wednesday, December 18th. Finally, Sanford C. Bernstein decreased their price target on Microsoft from $501.00 to $500.00 and set an “outperform” rating for the company in a research report on Friday, October 25th. Three investment analysts have rated the stock with a hold rating and twenty-seven have issued a buy rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $509.90.

Microsoft Price Performance

The stock has a market cap of $3.20 trillion, a price-to-earnings ratio of 35.52, a P/E/G ratio of 2.37 and a beta of 0.90. The company has a debt-to-equity ratio of 0.15, a current ratio of 1.30 and a quick ratio of 1.29. The stock’s 50 day simple moving average is $428.90 and its two-hundred day simple moving average is $428.88.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data on Wednesday, October 30th. The software giant reported $3.30 earnings per share for the quarter, beating analysts’ consensus estimates of $3.10 by $0.20. Microsoft had a return on equity of 34.56% and a net margin of 35.61%. The company had revenue of $65.59 billion for the quarter, compared to the consensus estimate of $64.57 billion. During the same period in the previous year, the business earned $2.99 earnings per share. The company’s quarterly revenue was up 16.0% on a year-over-year basis. On average, analysts forecast that Microsoft Co. will post 12.93 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, March 13th. Stockholders of record on Thursday, February 20th will be issued a $0.83 dividend. This represents a $3.32 annualized dividend and a dividend yield of 0.77%. The ex-dividend date of this dividend is Thursday, February 20th. Microsoft’s payout ratio is currently 27.39%.

Microsoft declared that its Board of Directors has initiated a stock buyback program on Monday, September 16th that authorizes the company to buyback $60.00 billion in outstanding shares. This buyback authorization authorizes the software giant to reacquire up to 1.9% of its stock through open market purchases. Stock buyback programs are generally an indication that the company’s leadership believes its shares are undervalued.

Insider Transactions at Microsoft

In related news, EVP Judson Althoff sold 25,000 shares of the business’s stock in a transaction that occurred on Friday, November 22nd. The shares were sold at an average price of $417.00, for a total transaction of $10,425,000.00. Following the completion of the sale, the executive vice president now directly owns 117,294 shares of the company’s stock, valued at $48,911,598. The trade was a 17.57 % decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CMO Takeshi Numoto sold 1,000 shares of the firm’s stock in a transaction that occurred on Friday, November 22nd. The shares were sold at an average price of $414.72, for a total transaction of $414,720.00. Following the completion of the transaction, the chief marketing officer now directly owns 57,511 shares in the company, valued at approximately $23,850,961.92. The trade was a 1.71 % decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 41,200 shares of company stock worth $17,383,892. Corporate insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

A number of institutional investors have recently made changes to their positions in MSFT. International Assets Investment Management LLC grew its position in shares of Microsoft by 48,526.1% during the 3rd quarter. International Assets Investment Management LLC now owns 38,501,645 shares of the software giant’s stock worth $16,567,258,000 after buying an additional 38,422,466 shares during the period. Wulff Hansen & CO. boosted its stake in Microsoft by 47,196.6% during the 2nd quarter. Wulff Hansen & CO. now owns 4,834,658 shares of the software giant’s stock worth $2,160,850,000 after acquiring an additional 4,824,436 shares during the last quarter. Geode Capital Management LLC grew its holdings in Microsoft by 2.0% during the third quarter. Geode Capital Management LLC now owns 165,024,812 shares of the software giant’s stock valued at $70,790,682,000 after purchasing an additional 3,264,648 shares during the period. Assenagon Asset Management S.A. increased its stake in Microsoft by 67.5% in the third quarter. Assenagon Asset Management S.A. now owns 5,963,863 shares of the software giant’s stock valued at $2,566,250,000 after purchasing an additional 2,404,348 shares in the last quarter. Finally, Baillie Gifford & Co. raised its holdings in Microsoft by 46.1% in the third quarter. Baillie Gifford & Co. now owns 7,048,244 shares of the software giant’s stock worth $3,032,859,000 after purchasing an additional 2,222,483 shares during the period. 71.13% of the stock is owned by institutional investors and hedge funds.

About Microsoft

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.