Microsoft Stock Hit With Pre-Earnings Bear Note

The tech name will report Q4 results after tomorrow's close

Digital Content Manager
Jul 25, 2022 at 12:30 PM
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Technology stocks will be taking the earnings confessional by storm this week, with Microsoft Corporation (NASDAQ: MSFT) among them. Last seen down 0.5% to trade at $259.17 at last check, the company is set to report fiscal fourth-quarter earnings after the close tomorrow, July 26. Already, the equity is attracting analyst attention, with Wells Fargo cutting its price target to $350 from $400 ahead of the event. The brokerage said inflation, rising rates, and a stronger U.S. dollar are likely to weigh on MSFT's quarterly outlook. 

As usual, analysts are optimistic towards Microsoft stock, with 23 of the 24 in question calling it a "buy" or better rating, while the 12-month consensus target price of $343.99 is a 32.8% premium to current levels. Should more firms follow Wells Fargo's lead, the equity could drop even lower.

Its status as one of the world's most powerful tech companies hasn't spared Microsoft stock from recent headwinds. The security is down 22.9% year-to-date, with two of its most recent rallies rejected at the $270 mark. Plus, the 80-day moving average lingers overhead.

MSFT 80 Day

A quick glance at Microsoft stock's history of post-earnings moves returns reveals mixed reactions, with shares finishing four of eight next-day sessions higher, including a 4.8% pop in April. The equity averaged a move of 3% in the past two years, regardless of direction, but this time around the options pits pricing in a much bigger swing of 7%. 

 

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