Wall Street analysts’ view of IBM
Earlier in this series, we looked at IBM’s (IBM) recently announced fiscal 1Q16 results. We explored the performance of its various operating segments and how they will contribute to the company’s growth going forward.
Now let’s take a look at select market-centric views and metrics for IBM. Let’s start with Wall Street analysts’ views on the company. As we can see in the graph below, of the 27 analyst recommendations on IBM stock, 56% were “hold” as of April 19, 2016. About 26% were “buy,” and 19% were “sell.” Analysts’ expectations for IBM stock haven’t changed much after the company’s recent fiscal 1Q16 earnings announcement.
IBM’s price performance
IBM’s stock price movement during the past month has been positive. As of April 19, 2016, the stock has risen 3.7%.
Analysts’ target prices
The Wall Street consensus target price for IBM is $142.83 per share. The median target price was $150 as of April 19, 2016. IBM’s closing price was $143.98 on the same date.
UBS (UBS) analyst Steven Milunovich reiterated a “neutral” rating on IBM stock and raised the target price to $150 from $132. He stated, “We give IBM credit for changing the narrative … still the transformation is in the third inning.” Recently, Morgan Stanley’s (MS) Katy L. Huberty stated that the firm believes IBM stock could reach $195.
Investors interested in exposure to IBM could consider investing in the Technology Select Sector SPDR ETF (XLK) and the SPDR S&P 500 ETF (SPY). XLK and SPY have exposures of 38% and 8.7%, respectively, to application software and invest 3.1% and ~0.7% of their holdings, respectively, in IBM.