Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. Its segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment includes Office Consumer, LinkedIn, dynamics business solutions, and Office Commercial.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

MSFT has shown impressive profit margins in FY22, where the industry median is negative, MSFT has shown outperformance in all the segments when compared to the industry median which demonstrates efficient resource allocation and operational efficiency. Additionally, the other graph shows that MSFT is having an impressive positive ROE of 47.2% as compared to a negative 5.1% of the industry median implying that the company has generated wealth for its shareholders, even in the challenging macro environments.

1.4 Top 10 shareholders:

• The top 10 shareholders together form ~28.53% of the total shareholding, signifying diverse shareholding. The Vanguard Group, Inc. and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~8.42% and ~4.47%, respectively.
  

1.5 Dividend history:

As can be seen from the chart, MSFT has a consistent history of dividend distribution over the last decade. The Board of Directors of MSFT Corporation has recently declared a quarterly dividend of USD 0.68 per share of common stock, reflecting a 6 cent or 10% increase over the previous quarter's dividend. The dividend is payable on December 8, 2022, to stockholders of record as of the close of business on November 17, 2022. 

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY22:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: Price-to-Earnings Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 3: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Disclaimer

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