Citi Lowers Microsoft's Target Price to $570, Maintains 'Buy' Rating

On July 15, Citi released a research report stating that due to the compression of valuation multiples in the software industry, it has lowered Microsoft's target price from $620 to $570, based on a projected price-to-earnings ratio of 25 times for the fiscal year 2028, down from 28 times, while maintaining a 'Buy' rating. The bank expects strong performance in the fourth fiscal quarter; entering fiscal year 2027, Microsoft is expected to achieve stronger returns from its core businesses (Azure and M365 CoPilot) that will accelerate growth, ultimately driving continued acceleration in overall revenue and earnings per share.