IBM reports profit tomorrow, what to expect

As COVID-19 recedes, many businesses are taking advantage of rising retail and travel trends as consumers move out of their homes and spend money they’ve saved over the past year. One of those companies is tech giant International Business Machines Corporation (IBM). The company is expected to release its post-market earnings report on Monday, July 19. (See IBM stock charts on TipRanks)

About the shares in his report, Amit Daryanani of Evercore ISI said the Q2 results should be a “solid quarter” for IBM. The five-star analyst wrote that IBM should benefit from “improved IT spend, easy year-over-year comparison, and favorable settings (vs. historical seasonality).”

Daryanani reiterated a Hold recommendation for the stock and set a price target of $150. This suggests a potential 12-month increase rate of 7.99%.

He was also very encouraged by the change in executive management, with new CEO and chairman Arvind Krishna replacing Jim Whitehurst. The change is said to have given the age-old company “a new sense of optimism.”

“Initiatives such as an open door policy and office hours where employees can discuss anything with Mr. Krishna, combined with his focus on software assets, have created a sense of excitement and empowerment within the organization,” Daryanani wrote.

IBM has also spun off a new company called Kyndryl from its IT infrastructure services arm. The future company will be responsible for managing digital transformations for infrastructure services. Daryanani expects this new company to emerge during the earnings call.

On TipRanks, IBM has an analyst rating consensus of Moderate Buy, based on 4 Buy and 3 Hold ratings and 1 Sell rating. The average IBM price target is $153, reflecting a possible 12-month upward effect of 10.15%. IBM closed trading Friday at a price of $138.90 a share.

Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.