IBM

By Dean Seal International Business Machines’ profit rose in the fourth quarter as strong demand for artificial intelligence pushed revenue higher than analysts had expected. Shares are up 23% over 12 months and rose to a nine-year high of $174.86 in Wednesday trading. Chief Executive Arvind Krishna said client demand for AI is accelerating and that IBM’s book of business for its generative AI platform Watsonx roughly doubled between the third quarter and the fourth. Each of the legacy tech giant’s segments reported higher revenue. The biggest gain came from IBM’s consulting business while its infrastructure unit logged a smaller bump. The top line of IBM’s software business, its largest by revenue, rose 3% to $7.5 billion as growth from its cloud-computing subsidiary Red Hat and smaller gains from automation and AI more than offset a 5% decline from its security division. IBM’s quarterly report, by the numbers: — Revenue […]

IBM (IBM) reported Q4 non-GAAP diluted earnings late Wednesday of $3.87 per share, up from $3.60 a year earlier. Analysts polled by Capital IQ expected $3.80 normalized. Revenue in the quarter ended Dec. 31 rose to $17.4 billion from $16.7 billion a year earlier. Analysts surveyed by Capital IQ expected $17.3 billion. The company said it expects 2024 constant currency revenue growth consistent with its mid-single-digit model. At current foreign exchange rates, the currency will likely be about a one-point headwind to revenue growth. Analysts polled by Capital IQ expect $63.4 billion.

IBM’s book of business for its Watsonx platform and generative AI offerings roughly doubled from 3Q to 4Q, with two thirds of that coming from signings in its consulting segment and the rest flowing through its software unit. CFO Jim Kavanaugh tells WSJ the company has had thousands of hands-on client interactions quarter-to-quarter and seen the number of client pilots of its AI tech shoot up fivefold. “We’re seeing a lot of acceleration overall,” he says.

After cutting about 3,900 jobs at the beginning of 2023, IBM is entering the new year with confidence that it will maintain a relatively stable headcount in 2024, CFO Jim Kavanaugh tells WSJ. That said, the legacy tech giant “constantly has to revitalize and reskill our mix to be competitive in the marketplace,” the CFO says. IBM spent about $400 million on workforce rebalancing and reskilling in 2023 and expects to spend a similar amount this year, although there are no concrete management plans in place right now, Kavanaugh says.

The following is a summary of the International Business Machines Corporation (IBM) Q4 2023 Earnings Call Transcript: Financial Performance: IBM reported Q4 revenue of $17.4 billion, operating pretax income of $4.2 billion, and operating earnings per share of $3.87. The company’s total revenue for the year was nearly $62 billion, up 3% with free cash flow at $11.2 billion, the strongest level of cash generation since 2019. IBM ended the year with cash of $13.5 billion, up $4.6 billion year-over-year with total debt at $56.5 billion. Operating gross profit margin expanded by 130 basis points and operating pretax margin expanded by 40 basis points. For 2024, IBM expects performance to be in line with its mid-term model with mid-single digit revenue growth and about $12 million of free cash flow. Business Progress: IBM noted solid growth in both software and consulting and anticipates software revenue growth to be slightly above

International Business Machines Corp (NYSE:IBM), will be reporting its fourth-quarter earnings on Jan. 24. Wall Street expects $3.76 in EPS and $17.23 billion in revenues as the company reports after market hours.

IBM (NYSE:IBM) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/19/2024 17.42% Evercore ISI Group $165 → $200 Upgrades In-Line → Outperform 01/05/2024 5.68% Jefferies → $180 Initiates Coverage On → Hold 01/05/2024 -16.05% Societe Generale → $143 Downgrades Hold → Sell 11/13/2023 -17.81% Wedbush → $140 Reiterates Neutral → Neutral 10/26/2023 5.09% RBC Capital $188 → $179 Maintains Outperform 10/26/2023 -9% BMO Capital $152 → $155 Maintains Market Perform 10/26/2023 -17.81% Wedbush → $140 Reiterates Neutral → Neutral 10/17/2023 -23.68% Morgan Stanley $135 → $130 Maintains Equal-Weight 09/20/2023 10.37% RBC Capital → $188 Initiates Coverage On → Outperform 07/20/2023 -6.06% B of A Securities $152 → $160 Maintains Buy 07/20/2023 -15.46% Stifel $140 → $144 Maintains Buy 07/20/2023 -20.74% Morgan Stanley $135 → $135 Reiterates Equal-Weight → Equal-Weight 07/20/2023 -17.81% Wedbush → $140 Reiterates Neutral → Neutral 07/20/2023 -10.76% BMO Capital

International Business Machines (IBM) shares were about 2.5% higher in recent Friday trading after Evercore ISI upgraded its rating on the company to outperform from in line and raised its price target to $200 from $165. Trading volume stood at more than 4.0 million shares against a daily average of about 4.23 million shares.

IBM (IBM) is expected to overcome Wall Street pessimism by reporting in-line Q4 results and issuing in-line to “better than feared” 2024 guidance next week, Morgan Stanley said in a note Tuesday. Morgan Stanley said it expects IBM to project a 3% to 5% year-over-year increase in its 2024 revenue and around $11 billion in free cash flow for 2024, in-line to higher than consensus and buyside expectations. The analysts said while investors and other analysts have largely priced those 2024 forecasts into IBM’s share price, the company’s “resilient” fundamentals coupled with an accelerating order book for artificial intelligence applications support the company’s post-earnings momentum. IBM is scheduled to report its Q4 results and issue its 2024 expectations on Jan. 24. Morgan Stanley raised its price target on IBM by $3 to $152 while keeping its equalweight stock rating,

IBM (NYSE:IBM) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/05/2024 -9.96% Societe Generale → $143 Downgrades Hold → Sell 11/13/2023 -11.85% Wedbush → $140 Reiterates Neutral → Neutral 10/26/2023 12.71% RBC Capital $188 → $179 Maintains Outperform 10/26/2023 -2.41% BMO Capital $152 → $155 Maintains Market Perform 10/26/2023 -11.85% Wedbush → $140 Reiterates Neutral → Neutral 10/17/2023 -18.15% Morgan Stanley $135 → $130 Maintains Equal-Weight 09/20/2023 18.37% RBC Capital → $188 Initiates Coverage On → Outperform 07/20/2023 0.74% B of A Securities $152 → $160 Maintains Buy 07/20/2023 -9.33% Stifel $140 → $144 Maintains Buy 07/20/2023 -15% Morgan Stanley $135 → $135 Reiterates Equal-Weight → Equal-Weight 07/20/2023 -11.85% Wedbush → $140 Reiterates Neutral → Neutral 07/20/2023 -4.29% BMO Capital $150 → $152 Maintains Market Perform 07/17/2023 -5.55% BMO Capital $145 → $150 Maintains Market Perform 07/12/2023 -15% Morgan Stanley $135 →

Jefferies analyst Brent Thill initiates coverage on IBM (NYSE:IBM) with a Hold rating and announces Price Target of $180.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We raise our target by $27 to $177, on a P/E of 17.5x our ’24 EPS estimate, near peers and above IBM’s one-year average (14.3x) as well as our previous multiple (15.1x). We increase our ’24 EPS view to $10.10 from $9.95 and initiate ’25 at $10.52. We think IBM can structurally lift its multiple as it grows its proportion of recurring revenue (>50% of ’22 sales) and software revenue (42.5% of Q3 sales), while attaching itself to themes like cloud migration and GenAI, allowing it to exhibit resilient growth despite a soft macro environment. We are encouraged by the success of IBM’s AI platform (watsonx) and think its recently-announced AI governance toolkit (watsonx.gov) will find success as conversations accelerate around the responsible application of AI. We