Wall Street’s take on IBM stock
In this series, we’ve compared the technical indicators for International Business Machines (IBM) and peers Cognizant Technology Solutions (CTSH), Accenture (ACN), and Teradata (TDC). We’ve also looked at IBM’s value proposition in the systems software space.
Of the 26 analyst recommendations for IBM stock, 56% were “hold” recommendations. “Buy” and “sell” ratings stood at 22% each. The analysts’ recommendations for IBM have gotten worse. Lower-than-expected fiscal 2Q17 results and slowing growth in the Strategic Imperatives segment have left little room for optimism.
IBM’s price performance
IBM’s stock price movement, as expected, has been negative for the past month, falling more than 5% as of July 24, 2017. In the past year, IBM stock has generated a -8%.
The consistent decline in its revenues and its dismal performance has hampered IBM stock’s upward movement. To top it off, this year, legendary investor Warren Buffett sold off nearly one-third of his stake in IBM, which further contributed to the negative sentiment around the stock.
The Wall Street analysts’ consensus target price for IBM is now $159.35 per share. Its median target price was $160 on July 24, 2017, when it was trading at $147.08.
Investors interested broadly in the tech sector—and especially IBM—can consider investing in the SPDR S&P 500 ETF (SPY) (SPX), which has an 8.7% exposure to the application software space and invests ~0.7% of its holdings in IBM.