The Dow Jones Industrial Average (DJINDICES:^DJI) was lagging behind the other major U.S. stock indexes on Monday afternoon, up just 0.1% at 2 p.m. EDT after spending much of the day in the red. Confirmed cases of COVID-19 continue to surge in the United States, and some cities are pulling back on their reopenings. Notably, Chicago is ordering the shutdown of indoor service at bars, along with enacting other restrictions meant to stop the recent increase in cases.

Shares of tech giant Microsoft (NASDAQ:MSFT) surged on Monday as analysts raised their price targets ahead of the company's earnings report. Meanwhile, Coca-Cola (NYSE:KO) stock headed lower as investors braced for steep declines in revenue and profit.

The Microsoft logo

Image source: Microsoft.

Microsoft price targets raised ahead of earnings

Software and cloud computing giant Microsoft is scheduled to report its fiscal fourth-quarter results on Wednesday, July 22. Analysts are expecting decent results, with average estimates calling for 8.2% revenue growth and flat earnings per share (EPS) compared with the prior-year period. In the fiscal third quarter, which ended in March, revenue was up 15% and EPS soared 23%.

Analysts are growing increasingly optimistic on Microsoft despite the pandemic. Jefferies maintained its buy rating on the stock on Monday and raised its price target from $200 to $240. Jefferies expects impressive results from the company, but it pointed to a historically high stock price as one reason for concern.

Barclays also raised its price target on Microsoft, from $204 to $234. While IT spending has come under pressure during the pandemic, Barclays expects Microsoft to be less affected. Raymond James also chimed in with a price target bump, boosting its target from $208 to $225 due to Azure, Office 365, and the gaming business.

Exactly how Microsoft fares in the months ahead as the U.S economy struggles under the weight of the pandemic is unclear. On one hand, the shift to working at home will drive demand for some of its software, like Microsoft Teams. On the other hand, businesses failing due to the weak economy could eliminate some of Microsoft's customers.

Microsoft stock was up about 3.3% by Monday afternoon. Shares have soared roughly 32% since the beginning of 2020.

Low expectations for Coca-Cola

Analysts are expecting some rough numbers for beverage giant Coca-Cola when it reports its second-quarter results on Tuesday morning. Average estimates call for a 28% revenue decline and a 37% earnings decline. The company was hit hard by the lack of demand from the restaurant industry during the pandemic-driven shutdown.

In April, Coca-Cola disclosed that it was experiencing global volume declines of roughly 25% since the start of that month. The away-from-home channels, which typically represent around half of the company's total revenue, were largely responsible for the decline.

The company also said that its second-quarter and full-year results would depend on the duration of social distancing and shelter-in-place orders, as well as the pace of the economic recovery. Restaurants have partially reopened for dining in many areas around the United States, but with cases of COVID-19 surging in some areas, the recovery in restaurant visits is at risk.

Shares of Coca-Cola were down 1.5% Monday afternoon as investors braced for a tough quarterly report. The stock has lost about 17% of its value this year.