Why Analysts Are Chasing Microsoft Higher and Higher

By Chris Lange Updated Jan 12, 3:26PM EST · Published Jan 27, 11:15AM EST

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Why Analysts Are Chasing Microsoft Higher and Higher — © Thinkstock

Microsoft Corp. (NASDAQ: MSFT) has a couple of things in common with the Dow Jones Industrial Average, S&P 500 and the Nasdaq. First of all, Microsoft is a member of each of these three indexes, and second that they are all posting all-time highs. Ultimately these indexes have benefited from the recent Trump rally, as well as a strong corporate earnings season thus far. Microsoft has played a big role in pushing these markets higher, at least a few key analysts think so.

24/7 Wall St. has included some brief highlights from Microsoft’s earnings report, as well as what a few analysts are saying after the fact.

The software giant posted strong results for its fiscal second quarter. Microsoft said it had $0.83 in earnings per share (EPS) and $26.1 billion in revenue. The consensus estimates from Thomson Reuters were $0.79 in EPS and revenue of $25.28 billion. The same period of last year reportedly had EPS of $0.78 and $25.69 billion in revenue.

Also during this quarter, Microsoft completed the acquisition of LinkedIn on December 8, 2016. For the second quarter of fiscal year 2017, the results of LinkedIn, including amortization of acquired intangible assets, contributed revenue, operating income, net income and diluted earnings per share of $228 million, $(201) million, $(100) million, and $(0.01), respectively.

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A few analysts weighed in on Microsoft after the earnings report:

Stifel raised its price target to $68 from $66.
Instinet has a Buy rating and raised its target to $70 from $68.
Raymond James raised its price target to $73 from $69.
BMO has an Outperform rating with a price target of $71.
Canaccord Genuity raised the price target from $60 to $65.
Barclays has an Overweight rating and raised the target to $71 from $70.
Goldman Sachs raised the price target to $72 from $68.
Wunderlich has a Buy rating and raised the price target from $70 to $75.
Jefferies maintained its Underperform rating and raised the target to $45 from $43.
RBC raised the price target to $71 from $65.
Cowen has an Outperform rating and raised the price target from $66 to $70.

Shares of Microsoft were trading up nearly 2% at $65.48 on Friday, with a consensus analyst price target of $65.91 and a 52-week trading range of $48.04 to $65.64.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.