Analysts’ views of Microsoft
In this series, we’ve looked at the factors that helped Microsoft (MSFT) report better-than-expected fiscal 1Q17 results and boost its value proposition in the US software industry. We’ve also compared Microsoft’s forward dividend yield with that of Oracle (ORCL), Red Hat (RHT), and ServiceNow (NOW) and looked at these companies’ forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples.
Of the 40 analyst recommendations on Microsoft’s stock, ~58% have issued a “buy” recommendation as of October 24, 2016, and 32% have issued a “hold.” The remaining 10% have issued a “sell.”
Wunderlich has upgraded Microsoft to a “buy” rating from the previous “hold,” with a price target of $70. UBS reiterated its “buy” rating with a price target of $66.
The median target price set by analysts for Microsoft was $61 on October 24, 2016. Microsoft’s closing price was $59.66 that day.
Microsoft’s stock performance
Microsoft’s stock performance has been positive for the past month. As of October 24, 2016, the stock has risen ~3.9% in the past month. During the past year, it has risen ~13%.
For diversified exposure to select software companies in the United States, you can consider investing in ETFs such as the SPDR S&P 500 ETF (SPY), which has an 8.0% exposure to the application software industry.