Sign InMicrosoft Corporation (MSFT) Stock Analysis: Hold Recommendation Amidst Positive Developments
Summary
Microsoft Corporation (MSFT) is a multinational technology company specializing in software development and related services, currently trading near its 50-day moving average but showing potential for an upward trend in the upcoming week, with positive news surrounding their developments and a fair valuation. (Date of analysis: July 7, 2023)
Company Overview
Microsoft Corporation (MSFT), listed on the NASDAQ, is a multinational technology company which specializes in the development, manufacture, licensing, support and selling of computer software, consumer electronics, personal computers, and related services.
Latest Stock Performance
Microsoft's last close was at $337.22 on July 7, 2023, with a change of -4.05 (-1.19%). The trading volume was 21.01 million against an average volume of 27.15 million. The company currently carries a high market cap of $2.51 trillion.
Stock Trend and Moving Average
The 50-day moving average is set at $322.95, while the 200-day moving average is at $268.87. Despite the stock trading at a price close to its 50-day moving average, it certainly shows strength as it remains considerably above the 200-day moving average.
Technical Analysis
Microsoft's Relative Strength Index (RSI14) is at 40, indicating that the stock is currently neither overbought nor oversold. Historically, an RSI less than 30 suggests the stock is oversold and potentially a value, while an RSI above 70 suggests the stock may be overbought and potentially overvalued. Additionally, the MACD, which represents the moving average convergence-divergence, is at 3.62 for the three-month span.
Financial Metrics
The company reflects an earnings per share (EPS) of $9.38 and price-to-earnings ratio (PE) of 35.95. The shares outstanding for the company stand at 7.44 billion.
Target Consensus and DCF Analysis
The stock's target high, low, and median are $420, $220, and $300 respectively, with a consensus of $311.97. This suggests that analysts hold mixed views concerning the stock's future performance. Meanwhile, the discounted cash flow analysis (DCF) brings a calculated value of $339.07.
Upcoming Events and News
Microsoft's earnings announcement will be held on July 24, 2023. Regarding recent news, the company has been highlighted in its battle with Google over AI programs to crack the healthcare industry. Other news articles note the bullish and bearish sentiments among investors, and one specifically outlined that institutional investors have been selling their stock holdings in Microsoft.
Prediction for Next Trading Session and Upcoming Week
Based on the above technical data and analysis, Microsoft's shares are predicted to hover around the $337.22 mark in the next trading day as the stock is currently near its 50-day moving average. However, due to the recent trend and news surrounding the technology and AI industry, there might be potential for an upward trend throughout the upcoming week that could push the price towards the $340 region, especially if the bullish sentiment in the market persists.
Final Evaluation
Despite a 1.19% decline in the previous trading session, Microsoft's stock value remains high. Additionally, positive news surrounding their developments with OpenAI highlight potential advancement for the company. The DCF analysis shows that the stock is potentially fairly priced, and with the upcoming earnings announcement, investors might show increased interest.
Therefore, considering the company's heavy market cap, ongoing developments, and position in the technology sector, Microsoft (MSFT) is classified as a Hold. However, investors are reminded to consider market volatility, potential global economic changes, and their individual risk tolerance when making investment decisions.
