IBM Shares Gain 5% Following Q3 Results

• Wamsi Mohan from Bank of America Securities sets a price target of $250 for IBM (NYSE:IBM), indicating a potential upside of about 14.87%.
• Despite an optimistic outlook, IBM's stock faces a decline, with early trading showing a decrease of 6.217% or $14.47.
• Analysts have mixed views on IBM, with price targets ranging from $208 to $260, reflecting the uncertainty surrounding the company's performance.

On October 24, 2024, Wamsi Mohan from Bank of America Securities set a price target of $250 for IBM (NYSE:IBM). At the time, IBM's stock was priced at $217.63, suggesting a potential upside of about 14.87%. IBM, a major player in the technology sector, competes with companies like Microsoft and Oracle. It offers a range of services, including cloud computing and artificial intelligence.

Despite the optimistic price target from Bank of America Securities, IBM's shares faced a decline in early trading following disappointing third-quarter revenues. The stock is currently priced at $218.28, reflecting a decrease of 6.217% or $14.47. During the day, IBM's stock fluctuated between $216.16 and $221.10, indicating market volatility.

Analysts have mixed views on IBM's future. Morgan Stanley's Erik Woodring maintained an Equal-Weight rating but lowered the price target from $217 to $208. In contrast, BMO Capital Markets' Keith Bachman increased the price target from $235 to $260, maintaining a Market Perform rating. This divergence in opinions highlights the uncertainty surrounding IBM's performance.

Both Wamsi Mohan from Bank of America Securities and James Schneider from Goldman Sachs upheld a Buy rating with a $250 price target. Similarly, RBC Capital Markets' Matthew Swanson maintained an Outperform rating with the same target. These analysts express confidence in IBM's potential, despite recent setbacks.

Piper Sandler's James Fish pointed out a pause in discretionary spending as a significant takeaway from IBM's results. This could impact IBM's growth, as discretionary spending often influences technology investments. IBM's market capitalization is approximately $201.07 billion, with a trading volume of 9.83 million shares, reflecting its significant presence in the market.

International Business Machines (NYSE:IBM) reported third-quarter earnings that surpassed analyst expectations, but a slight revenue miss sent its shares down more than 6% intra-day today.

The tech giant posted adjusted earnings per share of $2.30, beating the Street estimate of $2.22. However, revenue reached $15 billion, just shy of the anticipated $15.04 billion. This represented a modest 1% increase year-over-year, or 2% when adjusted for constant currency.

IBM's Software segment was a standout performer, with revenue rising 9.7% to $6.5 billion, driven by a strong 14% growth in its Red Hat business. In contrast, the Infrastructure segment struggled, with revenue declining 7% to $3 billion.

Despite the revenue shortfall, IBM reaffirmed its full-year 2024 outlook, projecting constant currency revenue growth in line with its mid-single-digit model. The company also boosted its free cash flow guidance, expecting it to exceed $12 billion for the year.

• Jefferies has raised the price target for IBM (NYSE:IBM) from $200 to $245, maintaining a "Hold" rating.
• IBM's Granite 3.0 models, designed for business applications, are now available for commercial use, enhancing IBM's AI offerings.
• The Granite Time Series model, part of the Granite 3.0 lineup, excels in zero and few-shot forecasting, outperforming larger models.

On October 21, 2024, Jefferies maintained its "Hold" rating for IBM (NYSE:IBM), while raising the price target from $200 to $245, as highlighted by TheFly. At the time, IBM's stock was priced at $232.20. This decision comes amid IBM's strategic advancements in artificial intelligence, particularly with the release of its Granite 3.0 models.

IBM's Granite 3.0 models are designed for business applications and are open-source, unlike competitors such as Microsoft, which charge for access. IBM offers a paid service called Watsonx to help businesses run these models in data centers. Some Granite models are now available for commercial use on the Watsonx platform, enhancing IBM's AI offerings.

The Granite models, developed using Nvidia's H100 graphics processor units, are accessible through Nvidia's software tools. This allows businesses to integrate AI models more effectively. IBM's director of research, Dario Gil, emphasizes the models' performance, often surpassing or matching similarly sized models in academic and enterprise benchmarks.

A notable feature of the Granite 3.0 lineup is the Granite Time Series model, which excels in zero and few-shot forecasting. It outperforms models ten times larger, showcasing IBM's innovation in AI. Additionally, Granite will be the default model for Consulting Advantage, IBM's AI-powered delivery platform, used by 160,000 consultants.

IBM's stock, currently priced at $232.20, has seen a slight decrease of 0.29%, with a change of $0.68. The stock's trading range today is between $230.17 and $232.65. Over the past year, IBM's stock has reached a high of $237.37 and a low of $135.87, with a market capitalization of approximately $213.89 billion and a trading volume of 2,838,912 shares.

• Evercore ISI has upgraded IBM (NYSE:IBM) to Outperform, raising the price target from $215 to $240, indicating strong growth potential.
• IBM's focus on innovation in areas like artificial intelligence, cloud computing, and quantum computing is key to its competitive edge and market relevance.
• The stock's recent performance and market capitalization reflect investor confidence in IBM's strategic direction and financial health.

Evercore ISI's recent upgrade of IBM (NYSE:IBM) to Outperform, as reported by TheFly, signals a strong confidence in the company's future prospects. This upgrade, coupled with a raised price target from $215 to $240, suggests that analysts see significant growth potential in IBM. The company, known for its robust presence in the technology sector, has been making strategic moves to stay ahead in a competitive landscape, where innovation and adaptability are key.

IBM's ability to evolve and meet market challenges is a critical factor in its sustained relevance, as highlighted by The Motley Fool. This adaptability is not just about keeping pace but setting trends in the tech industry. IBM's focus on areas like artificial intelligence, cloud computing, and quantum computing positions it well against competitors and aligns with the reasons for Evercore ISI's optimistic outlook.

The stock's recent performance, with a slight increase to $205.625, reflects investor confidence following the upgrade. This price movement, within the context of a trading range between $203.04 and $207.76, underscores the market's positive reception to IBM's strategic directions and financial health. The company's market capitalization of approximately $189.41 billion, supported by a trading volume of 1,819,940 shares, further demonstrates its significant footprint in the tech sector.

IBM's comparison with Amazon, as noted by The Motley Fool, in terms of innovation and market strategy, highlights the company's strength in identifying and capitalizing on business opportunities. This ability to innovate and adapt is crucial for IBM's goal to sustain its market position and drive future growth, aligning with Evercore ISI's bullish stance on the stock.

Overall, the upgraded rating and price target by Evercore ISI, along with IBM's recognition for its adaptability and innovation, paint a promising picture for the company's future. This optimism is reflected in the stock's market performance and is a testament to IBM's enduring strength and strategic vision in the rapidly evolving tech landscape.

BofA Securities analysts reaffirmed their Buy rating and a $209 price target for IBM (NYSE:IBM) stock. The analysts attended IBM's Think 2024 event in Boston, where the company announced the release of its Granite model family into open source. The analysts noted that while large language models (LLMs) can be costly to train and operate, IBM is adopting a more pragmatic approach with smaller, more enterprise-friendly models, particularly for inferencing.

BofA reiterated the Buy rating, highlighting IBM's ongoing turnaround, revenue growth, and free cash flow improvements. They also emphasized IBM's defensive portfolio, attractive dividend yield, and underappreciated AI portfolio, which has a cumulative business value exceeding $1 billion.

BMO Capital analysts maintained their Market Perform rating and a $210 price target for IBM (NYSE:IBM), suggesting that for both IBM Consulting and Software segments, the current and consensus estimates for 2024 are achievable but unlikely to exceed expectations, with detailed analysis provided within their report.

Additionally, the sum of the parts valuation approach was applied, indicating that IBM's present valuation multiple is fair. Although IBM's operational performance and outlook have shown improvement compared to its past performance, the analyst sees limited potential for stock price appreciation from its current levels.

IBM's (NYSE:IBM) shares saw a significant rise of over 9% on Thursday following the announcement of its Q4 earnings, which exceeded analysts' expectations for both earnings per share (EPS) and revenue.

The technology and consulting giant reported a Q4 EPS of $3.87, surpassing the Street estimate of $3.77. Its revenue for the quarter was reported at $17.38 billion, exceeding the analysts' prediction of $17.23 billion.

Breaking down the revenue, IBM's software segment contributed $7.51 billion, a 3.1% increase year-over-year, but slightly below Wall Street's expectations of $7.69 billion. The consulting segment brought in $5.05 billion, marking a 5.8% rise from the previous year and narrowly missing the expected $5.11 billion.

The company's infrastructure revenue was notably strong at $4.6 billion, a 2.7% year-over-year increase and higher than the anticipated $4.35 billion.

IBM forecasts a free cash flow of $12 billion for the entire fiscal year, which is higher than the analyst estimate of $10.92 billion. Furthermore, IBM anticipates its revenue to grow by approximately 4-6% in 2024, surpassing the Wall Street projection of about 3%.