Microsoft 4th Quarter Earnings Preview

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By: Tunka Ishak

Introduction

This week will be an interesting one for earnings season as Microsoft (MSFT), the first member of the Trillion Dollar Club (known as the 4-comma club), will release its Q4 result on 22nd July 2020 after US market hours. In Quarter 3, reported in late April, Microsoft beat Wall Street EPS and profit expectations as lock-downs boosted revenue by 15% to $35.02 billion and earnings per share to $1.40.

The coronavirus outbreak and subsequent lock-downs has boosted the company as most businesses accelerated and enhanced their Azure subscription, Microsoft’s Intelligent Cloud business. Most analysts predict that the company will see a steady improvement of revenue as Microsoft continues to pour money into their cloud infrastructure. Analysts remain bullish on Microsoft stock prospects even though the market share price has rallied more than 30% in the year 2020 with market capitalization at $1.6 trillion.

Microsoft Corp. will publish fiscal year 2020 fourth-quarter financial results after the close of the market on Wednesday, July 22, 2020. The tech giant is expected to report adjusted earnings per share of $1.37 (source: Yahoo finance), unchanged as compared to the prior-year quarter, according to third-party consensus analyst estimates. Revenue is projected at $35.54 billion, up 5.50% from a year ago ($33.70 billion in revenue).

Technical Analysis

It has been a bullish year for Microsoft (MT5 symbol: #Microsoft). Its price reached an all-time high at $216.63 on 9th July 2020 and then slightly declined (closing July 21 at $208.95). The bullish momentum for technology stock remains high. The immediate support is at $201.21 followed by support at 50-DMA at $194.31. The only resistance is at a historic high of $216.36. Currently, the price movement is still observed in the ascending channel. The RSI has declined from overbought zone and is currently at 58.65, still in the bullish territory.


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