The Armonk, New York-based technology company, IBM, is expected to report its second-quarter earnings of $2.32 per share, representing a year-over-year growth of more than 6%, compared to $2.18 per share in the same quarter a year ago.
The world’s largest computer company is said to record revenue growth of about 1% to $18.24 billion. In the last four consecutive quarters, the company has averaged a profit of more than 5%.
Better-than-expected results, to be announced on Monday, July 19, should help the stock recover from last year’s losses. IBM stocks are up about 12% so far this year.
Comments from analysts
“We expect IBM to report upside risk in-line 2Q results from FX. While largely negative CIO surveys and recent headlines leave us with a more cautious ST, our LT outlook is unchanged. We see CEO Arvind’s sustainable growth strategy positively and believe the stock composition will improve in 2022,” said Katy L. Huberty, equity analyst at Morgan Stanley.
“We expect Cloud & Cognitive Software and GBS to continue to improve through 2021 as IT spending returns, but still believe 2021 is a challenging year for IBM given the upcoming spin of Infrastructure Services. In the short term we expect: IBM come under pressure from a greater mix of recurring revenue versus peers as IT spending recovers, difficult mainframe comparisons in the first half of 21 years and spin trades historically outperforming only after close . Results from our AlphaWise CIO surveys also indicate lower spending intentions with IBM despite the Red Hat deal. while we watch IBM’s changes in the market, M&A and investment in partnerships are positive, we need more evidence of improvement before we can get constructive.”
IBM stock price forecast
Eight analysts who gave stock ratings for IBM in the last three months a 12-month average price forecast of $151.75 with a high forecast of $175.00 and a low forecast of $121.00.
The average price target represents an 8.05% change from the last price of $140.45. Of those eight analysts, four rated “Buy,” three rated “Hold” and one rated “Sell,” Tipranks said.
Morgan Stanley gave the stock price forecast of $152 with a high of $205 in a bull scenario and $78 in the worst case scenario. The company gave an “Equal-weight” rating to the technology company’s stock.
Several other analysts have also updated their stock outlook. Credit Suisse Group raised their price target from $160 to $165 and gave the company an “outperform” rating. Stifel Nicolaus raised their $147 price target from $147 to $151 and gave the company a “buy” recommendation. BMO Capital Markets raised their price target from $138 to $150 and gave the company a “market performance” rating.
“We expect IBM to marginally beat consensus estimates for earnings and earnings. The company has reported better-than-expected earnings in each of the last four quarters, while revenue has exceeded consensus in three of the last four quarters,” Trefis analysts noted.
“The company has increased its investments in R&D and capex over the past year and has acquired seven companies focused on hybrid cloud and AI since October. As the vaccination pace picks up and countries open up, we expect the momentum to continue in the second quarter FY2021 results. Our prediction indicates that: IBM’s The valuation is around $140 per share, which is in line with the current market price of $140.”
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This article was originally posted on FX Empire