Guggenheim Issues a Hold Rating on IBMBy Austin Angelo
“We do not believe IBM’s Q1 report offered much to investors hoping for a turnaround, with revenues of $18.2B down another 2%Y/Y, ex-currency, and EPS of $2.38, in line with our estimate and $2.35 consensus, but only as tax and IP gains covered up another quarter of gross margin erosion. Services and consulting remained soft and Cognitive Solutions grew just +3%Y/Y even with M&A and Watson AI. IBM maintained its FY17E outlook for EPS $13.80+ but that looks to require an extraordinarily big Q4 and helping of optimism, and our own estimate declines 19c to $13.61. IBM’s multi-year revenue and EPS declines do look able to stabilize somewhat in 2017-18E, but we forecast them only flattening at best, with few reasons to expect any actual return to “growth” as new Strategic Imperatives (SI) mostly just represent a shift from legacy core.”
According to TipRanks.com, Cihra is a 4-star analyst with an average return of 10.4% and a 56.4% success rate. Cihra covers the Technology sector, focusing on stocks such as Hewlett Packard Enterprise, Samsung Electronics, and Western Digital.
Currently, the analyst consensus on IBM is Hold and the average price target is $166.14, representing a 2.8% upside.
In a report issued on April 4, BMO Capital also reiterated a Hold rating on the stock with a $170 price target.
Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is negative on the stock. Most recently, in February 2017, Diane Gherson, the SVP of IBM sold 5,000 shares for a total of $895,867.
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