IBM

International Business Machines (IBM) is expected to post “solid” Q3 results amid continued strength in generative artificial intelligence consulting as well as free cash flow performance, RBC Capital Markets said Thursday. The technology giant is scheduled to report Q3 results Oct. 23. RBC expects adjusted earnings of $2.24 per share on revenue of about $15.08 billion. “Peer results would suggest continued strength in consulting, while software traction likely remains the larger catalyst for sentiment improvement,” RBC analysts, including Matthew Swanson, said in a note to clients. “We continue to look for greater software traction, particularly from Red Hat, which management expects to reaccelerate in the 2H, as 1H strength was largely driven by better-than-expected infrastructure performance late in the refresh cycle as well as GenAI supporting consulting, while ‘discretionary spend’ saw headwinds,” the analysts said. RBC raised its price target on the IBM stock to $250 from $211 while maintaining […]

International Business Machines (IBM) delivered on free cash flow and Red Hat sales in Q1 for a “solid” start to the year despite trailing estimates on total revenue, RBC Capital Markets said Thursday in a report. “The highlight from our perspective was the performance of our two focal metrics” with free cash flow of $1.9 billion topping RBC’s $1.7 billion estimate and Red Hat revenue in line with expectations, according to the report. IBM on Wednesday reported Q1 adjusted earnings rose to $1.68 a share from $1.36 a year earlier, topping the Capital IQ consensus of $1.59. Revenue rose to $14.46 billion, trailing the consensus of $14.54 billion. “The biggest negative surprise was around the consulting space where IBM’s resiliency relative to the broader market over the past year showed some signs of softening,” RBC said. On Wednesday, IBM also agreed to buy multi-cloud infrastructure automation company HashiCorp (HCP) for

International Business Machines (IBM) would likely maintain its guidance for 2024 if the strength of the signings momentum continues for the company, BofA Securities said in a note Monday. The firm also expects IBM to guide revenue relatively in-line for Q2. “Heading into earnings we remain most concerned about continuing softness in consulting,” BofA said. The bottomline of IBM, which is set to release Q1 results after market close Wednesday, can be helped by gain on the sale of Weather assets, “offset somewhat by restructuring charges,” BofA said. For 2024, the firm said that it continues to expect free cash flow of about $12 billion for IBM “on higher profitability, lower cash requirement given changes to retirement plans, offset by higher [capital expenditures] and cash taxes.” BofA maintained IBM’s buy rating and $220 price objective.

Eric J. Savitz International Business Machines stock is trading higher Monday after Evercore ISI analyst Amit Daryanani advised investors to buy shares ahead of the company’s first-quarter-earnings report on April 24. Daryanani, who already had an Outperform rating and $215 target price on IBM stock, added shares to his firm’s “tactical outperform list.” On Monday, IBM stock is 1.6% higher to $185.27; shares had rallied 13% this year, and surged 45% over the last 12 months. The analysts notes that there have been some concerns about the potential for weakness in IBM’s consulting business given recent weakness at rival Accenture. But he contends that recent macro and IT-spending data have been improving — he thinks IBM’s momentum in consulting should continue. The company’s consulting arm grew 5.8% in the December quarter. The analyst expects the company to post March quarter revenue of $14.6 billion and profit per share of $1.60,

B of A Securities analyst Wamsi Mohan maintains IBM (NYSE:IBM) with a Buy and raises the price target from $200 to $220.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We lift our target by $20 to $216, utilizing a P/E of 21x our ’24 EPS view, near peers, but well above IBM’s three-year average (~14x) on growing interest in the company’s AI and hybrid cloud solutions and our view that investor sentiment is improving around the company following years of underperformance. We maintain our ’24 EPS view at $10.30 and raise our ’25 estimate by $0.12 to $11.02. IBM shares have experienced some multiple expansion in recent months. While we think shares will continue to justifiably trade below many higher-growth consulting peers given IBM’s high level of net debt ($43.1B exiting ’23, 86% of which is fixed with an average rate of 3%), we also believe the company still has some room to grow its multiple

Bernstein analyst Toni Sacconaghi maintains IBM (NYSE:IBM) with a Market Perform and raises the price target from $165 to $186.

IBM (IBM) issued 2024 guidance that topped expectations by analysts and teased a mainframe launch in 2025, setting the company up for strong revenue growth in the next two years, BofA Securities said in a reported dated Wednesday. The company on Wednesday estimated $12 billion in 2024 free cash flow amid increased profitability and reduced cash requirements from changes to its retirement plans, and IBM can deliver almost $13 billion in free cash flow in 2025, given the strong trajectory, BofA said. IBM’s software business probably will reaccelerate this year, and productivity improvements are poised support the company’s margins and cash flow, BofA said. IBM on Wednesday reported Q4 non-GAAP diluted earnings and revenue that topped estimates by analysts. BofA reiterated its buy rating on IBM and raised its price target to $200 from $170. Shares of IBM jumped 13% in recent Thursday trading.

By Emily Bary Company also notches a profit beat International Business Machines Corp.’s stock was surging more than 9% higher in Thursday afternoon trading after the technology giant topped profit expectations for the latest quarter and called out an uptick in artificial-intelligence demand. The company late Wednesday posted net income of $3.3 billion, or $3.55 a share, compared with $2.9 billion, or $2.96 a share, in the year-earlier period. On an adjusted basis, IBM (IBM) earned $3.87 a share from continuing operatings, whereas analysts were modeling $3.79 a share. Revenue rose to $17.4 billion from $16.7 billion, while the FactSet consensus was for $17.3 billion. The company saw a 3% increase in software revenue, a 6% bump in consulting revenue, and a 3% uptick in infrastructure revenue. Within the company’s software segment, which brought in $7.5 billion in total revenue, the company saw 8% growth in sales from Red Hat.

IBM (NYSE:IBM) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/25/2024 -0.01% Stifel $183 → $190 Maintains Buy 01/22/2024 -3.7% Stifel $144 → $183 Maintains Buy 01/19/2024 5.25% Evercore ISI Group $165 → $200 Upgrades In-Line → Outperform 01/05/2024 -5.28% Jefferies → $180 Initiates Coverage On → Hold 01/05/2024 -24.75% Societe Generale → $143 Downgrades Hold → Sell 11/13/2023 -26.33% Wedbush → $140 Reiterates Neutral → Neutral 10/26/2023 -5.8% RBC Capital $188 → $179 Maintains Outperform 10/26/2023 -18.43% BMO Capital $152 → $155 Maintains Market Perform 10/26/2023 -26.33% Wedbush → $140 Reiterates Neutral → Neutral 10/17/2023 -31.59% Morgan Stanley $135 → $130 Maintains Equal-Weight 09/20/2023 -1.07% RBC Capital → $188 Initiates Coverage On → Outperform 07/20/2023 -15.8% B of A Securities $152 → $160 Maintains Buy 07/20/2023 -24.22% Stifel $140 → $144 Maintains Buy 07/20/2023 -28.96% Morgan Stanley $135 → $135 Reiterates

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 price target by $19 to $196, utilizing a P/E of 19x our ’24 EPS estimate, near peers and above IBM’s 3-year historical average (~14x) and our previous multiple (17.5x) as IBM continues to execute its growth and cost-cutting initiatives despite a tough macro. We raise our ’24 EPS view by $0.20 to $10.30 and raise our ’25 view by $0.38 to $10.90. IBM prints Q4 sales of $17.4B and EPS of $3.87, both slightly above consensus ($17.3B/$3.78). Quarterly sales grew 4.1% Y/Y, highlighted by strong growth in Consulting (up 5.8%), which also exhibited an impressive quarterly book-to-bill of 1.30 (and 1.15 for the full year). We think IBM’s unique ability to provide consulting along with top-notch proprietary hardware and software solutions (including watsonx for

IBM RELEASES FOURTH-QUARTER RESULTS PR Newswire ARMONK, N.Y., Jan. 24, 2024 Revenue growth in all segments; Strong margin expansion and cash generation ARMONK, N.Y., Jan. 24, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced fourth-quarter 2023 earnings results. “In the fourth quarter, we grew revenue in all of our segments, driven by continued adoption of our hybrid cloud and AI offerings. Client demand for AI is accelerating and our book of business for watsonx and generative AI roughly doubled from the third to the fourth quarter,” said Arvind Krishna, IBM chairman and chief executive officer. “For the year, revenue growth was in line with our expectations, and we exceeded our free cash flow objective. Based on the strength of our portfolio and demonstrated track record of innovation, for 2024 we expect revenue performance in line with our mid-single digit model and about $12 billion in free cash flow.” Fourth-Quarter Highlights