From Nasdaq:

Investors rely on analyst ratings when considering stock purchases. Media reports sway stock prices, but are these brokerage-firm ratings reliable? Microsoft’s average rating is 1.23, suggesting a buy. However, these ratings can mislead investors due to analyst bias. Zacks Rank can help in determining a stock’s perceived price performance near future.

Zacks Rank assigns up to 5 groups on a scale of 1-5, correlating with a stock’s performance. Earnings estimate revisions are at the core of Zacks Rank, unlike the brokerage recommendation. With the current year’s consensus earning estimate at $11.13, Microsoft has a Zacks Rank #2 (Buy), indicating optimism in EPS estimates and profit.

The Buy-equivalent ABR for Microsoft may serve as a useful guide for investors. Analysts heavily believe in Microsoft’s stocks as seen in the consensus earning estimates for the current year. The future for the company seems bright.

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