How Analysts See IBM After Earnings
While revenues for IBM have been slumping for the past 14 quarters or so, but there was some good news in the most recent report.
International Business Machines Corp. (NYSE: IBM) posted mixed results when it reported earnings after the close on Monday. Keep in mind that revenues for Big Blue have been slumping for the past 14 quarters or so, but there was some good news in this report. A few analysts keyed in on Big Blue after earnings, but the sentiment was somewhat mixed.
24/7 Wall St. has included some of the key highlights from the earnings report, as well as what analysts are saying after the fact.
The company posted earnings of $2.95 per share (EPS) on revenues of $20.2 billion. The Thomson Reuters consensus estimates were EPS of $2.89 and $20.03 billion in revenue. Its results in the same quarter a year ago were $3.84 EPS and $20.81 billion in revenue.
In the second quarter, revenue from the Strategic Imperatives segment increased 12% to $8.3 billion, and cloud revenue was $11.6 billion over the past 12 months. Another boost was that IBM’s cloud as-a-service annual run rate totaled $6.7 billion in the quarter, representing a gain of 50% looking back to this period last year. IBM further said that its Strategic Imperatives revenue reached $30.7 billion over the trailing 12 months and now represents right at 38% of IBM’s companywide revenues.
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The company generated net cash from operating activities of $3.4 billion, and that figure would have been $3.1 billion if excluding the company’s global financing receivables. IBM’s free cash flow was $2.1 billion in the second quarter.
Over the course of the week, analysts piled into Big Blue:
- Cowen reiterated an Outperform rating.
- RBC Capital Markets reiterated a Sector Perform rating and raised its price target to $165 from $155.
- Societe Generale has a Sell rating with a $130 price target.
- Jefferies has an Underperform rating with a $125 price target.
- Deutsche Bank has a Hold rating with a $145 price target.
- BMO Capital Markets has a Market Perform rating with a $165 price target.
- Sanford Bernstein has a Market Perform rating with a $140 price target.
- JMP Securities has a Market Outperform rating with a $172 price target.
- Morgan Stanley has an Overweight rating with a $182 price target.
- Goldman Sachs reiterated a Neutral rating with a $147 price target.
- Credit Suisse reiterated an Underperform rating with a $110 price target.
- Citigroup has a Neutral rating with a $160 price target.
- JPMorgan reiterated a Hold rating.
Shares of Big Blue closed trading at $162.07 on Friday, with a consensus analyst price target of $153.90 and a 52-week trading range of $116.90 to $162.14.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
