A positive outlook will be approved?
Microsoft’s stock (NASDAQ: MSFT), the Washington-based global technology giant, is scheduled to publish its earnings for the fiscal Quarter ending Dec 2021. Different agencies have different estimates, however, almost all of them expect to see improvement in the results.
According to Zacks Investment Research, based on 11 analysts' forecasts, the consensus EPS forecast for the quarter is $2.29. The reported EPS for the same quarter last year was $2.03. MSFT has been beating the EPS expectations in the last five years.
The world’s largest software maker and the second-largest company by market capitalization on Wall Street after Apple are expecting to post revenue growth of nearly 17% to around $50.3 billion.
According to the world economic condition, most MSF services have been increasing, including Azure, M365, LNKD, PowerApps & Dynamics ERP. In the last quarter, Azure (Intelligent Cloud segment), which is one of the latest products of the company increased by 31% annually to lift the overall company portfolio, and it is expected to drive the second-quarter FY2022 results, as well. This increase is supposed to lift the company's profit also to $15.7, up from $15.03 billion. We should not also forget about the other segments of the company. Surface and Xbox profits for the company are estimated at $16.35 billion and $16.75 billion, up from $13.31 billion.
Among all positive projected estimates in the different segments, last week they announced that agreed already to buy the video game giant Activision Blizzard. The maker and distributor of popular video games like Call of Duty, World of Warcraft, Diablo, and Candy Crush, for $68.7 billion. This news cannot make any changes to the current reports' earnings, however, for the next quarter, we have to actively follow this segment. This agreement by itself will bring Microsoft to the third level in the gaming world, after Tencent and Sony, especially with the extensive programs for the Metaverse world.
In short, in the Microsoft report, we have to watch different points. First of all, for sure we need to check the company revenue and net income and the rate of change compared to forecasts. Company outlook and expectations for the next quarter are also is very important, to watch and know what they are expecting from their latest investments and projects, especially on Azure and Activision Blizzard. For long-term investors for sure always it is very important to see the manager's outlook on the projects and investments, therefore we have to watch that more closely.
On the share price front, the past 52 Week Range was between 224.22 and 349.67 with a 2.177T Market Cap. For now and while the share price is decreasing under $300, the one-year target price is about $370. From the technical point of view, Microsoft has very strong support at 288 USD (50 DMA), and breaching under this level can put the 100 DMA at $242 in the spotlight. Looking at the technical indicators at the main charts, all remain bearish. This bearish movement is also affected by the overall bearish movement all across the market. Return in the chart in line with a positive report needs positive sentiment in the market as well. Technically return above $288 can put the 20 DMA at $317.
