How Analysts Could View IBM Stock after Its 3Q17 Earnings
Wall Street’s view of IBM stock
In this series, we’ve explored International Business Machines’ (IBM) EV-to-EBITDA1 multiple compared to its peers in the software space—Microsoft (MSFT), Oracle (ORCL), and SAP (SAP). We’ve also looked at some aspects of IBM’s value proposition in the US software industry.
Now let’s take a look at a few select market-centric metrics and views for IBM stock. Let’s start with Wall Street analysts’ recommendations. As you can see in the chart below, of the 25 analysts covering IBM stock, 60% recommended a “hold” on October 10, 2017. About 24% recommended a “buy,” and 24% recommended a “sell.”
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Price performance and target prices
IBM’s stock price movement in the past month has been positive and on October 10, it rose ~4.1%. However, in the last one-year period, IBM stock has fallen close to ~5.5%. Earlier in this series, we discussed the factors that weighed on IBM stock. Better-than-expected 3Q17 earnings could provide a much-needed boost.
Wall Street’s consensus target price for IBM is $159.95 per share. On October 10, its median target price was $154.00, and the stock was trading at $148.45.
If you’re interested in gaining exposure to IBM as well as the overall technology sector, you can consider investing in the SPDR S&P 500 ETF (SPY). SPY has 23.3% exposure to the technology sector and invests ~0.58% of its holdings in IBM.
- enterprise value to earnings before interest, tax, depreciation, and amortization ↩