International Business Machines (NYSE:IBM) Stock Keeps "Outperform" Rating at Royal Bank Of Canada

Key Points

• Royal Bank of Canada reaffirmed its “outperform” rating on IBM and set a $270 price target, implying approximately 8.66% upside from the prior close.
• Analyst sentiment remains broadly positive: IBM has a consensus “Moderate Buy” rating, with 20 Buy, 12 Hold, and 2 Sell recommendations and an average target price of $264.72.
• IBM’s latest quarterly results exceeded expectations, with adjusted EPS of $2.95 versus the $2.85 consensus and revenue of $17.1 billion versus estimates of $16.82 billion; shares nevertheless fell 1.2% to $248.49 in Thursday trading.

International Business Machines (NYSE:IBM - Get Free Report)'s stock had its "outperform" rating reissued by research analysts at Royal Bank Of Canada in a report released on Thursday, Benzinga reports. They currently have a $270.00 price target on the technology company's stock. Royal Bank Of Canada's price target would indicate a potential upside of 8.66% from the company's previous close.

A number of other brokerages have also commented on IBM. Stifel Nicolaus boosted their price target on shares of International Business Machines from $235.00 to $260.00 and gave the company a "buy" rating in a research note on Thursday. Truist Financial set a $260.00 price target on International Business Machines in a report on Thursday. BMO Capital Markets reaffirmed a "market perform" rating and issued a $265.00 target price on shares of International Business Machines in a report on Thursday. The Goldman Sachs Group reissued a "buy" rating and set a $300.00 target price on shares of International Business Machines in a research report on Thursday. Finally, Evercore reduced their target price on shares of International Business Machines from $310.00 to $250.00 and set an "outperform" rating for the company in a research report on Thursday, July 16th. Twenty research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, International Business Machines has a consensus rating of "Moderate Buy" and an average target price of $264.72.

International Business Machines Stock Down 1.2%

IBM stock traded down $2.97 during midday trading on Thursday, reaching $248.49. 6,813,021 shares of the company's stock traded hands, compared to its average volume of 7,459,132. The company has a market cap of $234.11 billion, a price-to-earnings ratio of 22.05, a P/E/G ratio of 2.32 and a beta of 0.73. The firm's fifty day moving average price is $232.36 and its 200-day moving average price is $243.60. The company has a quick ratio of 0.74, a current ratio of 0.79 and a debt-to-equity ratio of 1.63. International Business Machines has a 52 week low of $199.19 and a 52 week high of $332.46.

International Business Machines (NYSE:IBM - Get Free Report) last announced its quarterly earnings results on Wednesday, October 21st. The technology company reported $2.95 EPS for the quarter, beating analysts' consensus estimates of $2.85 by $0.10. The business had revenue of $17.10 billion during the quarter, compared to analyst estimates of $16.82 billion. International Business Machines had a net margin of 15.52% and a return on equity of 35.65%. International Business Machines's quarterly revenue was up 4.7% on a year-over-year basis. During the same quarter in the previous year, the business posted $2.65 EPS. As a group, sell-side analysts forecast that International Business Machines will post 12.34 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other International Business Machines news, SVP Robert Thomas sold 25,000 shares of the stock in a transaction dated Wednesday, August 26th. The shares were sold at an average price of $230.32, for a total transaction of $5,758,000.00. Following the completion of the transaction, the senior vice president owned 47,800 shares in the company, valued at $11,009,296. This trade represents a 34.34% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 0.27% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On International Business Machines

A number of institutional investors and hedge funds have recently added to or reduced their stakes in IBM. Friday Financial boosted its stake in International Business Machines by 1.9% in the 2nd quarter. Friday Financial now owns 1,903 shares of the technology company's stock worth $583,000 after purchasing an additional 35 shares during the period. Trinity Wealth Management LLC boosted its stake in International Business Machines by 2.3% in the 2nd quarter. Trinity Wealth Management LLC now owns 1,695 shares of the technology company's stock worth $477,000 after purchasing an additional 38 shares during the period. Pettinga Financial Advisors LLC boosted its stake in International Business Machines by 3.6% in the 2nd quarter. Pettinga Financial Advisors LLC now owns 1,090 shares of the technology company's stock worth $307,000 after purchasing an additional 38 shares during the period. HHM Wealth Advisors LLC boosted its stake in International Business Machines by 4.6% in the 2nd quarter. HHM Wealth Advisors LLC now owns 928 shares of the technology company's stock worth $261,000 after purchasing an additional 41 shares during the period. Finally, Basecamp Wealth Advisors LLC boosted its stake in International Business Machines by 2.8% in the 1st quarter. Basecamp Wealth Advisors LLC now owns 1,598 shares of the technology company's stock worth $387,000 after purchasing an additional 44 shares during the period. Institutional investors own 58.96% of the company's stock.

Key Stories Impacting International Business Machines

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: IBM delivered a broad earnings beat. Third-quarter revenue rose approximately 5% year over year to $17.1 billion, ahead of the $16.82 billion consensus estimate, while adjusted EPS of $2.95 exceeded expectations near $2.85–$2.88. Software revenue increased 8%, infrastructure revenue rose 4%, and net income climbed 26% to $2.2 billion. IBM Third-Quarter Results
• Positive Sentiment: Cash generation and the software recovery supported the bull case. IBM reported $3.0 billion of free cash flow for the quarter and raised its full-year free-cash-flow outlook, expecting growth of more than $1 billion from the prior year. Management also cited stronger Red Hat demand, returning infrastructure deals and enterprise AI momentum. IBM Q3 Earnings Call Highlights
• Positive Sentiment: Analyst support improved. JPMorgan raised its price target to $269 and assigned an overweight rating, while Stifel increased its target to $260 with a buy rating. IBM also declared a quarterly dividend of $1.69 per share, equivalent to a 2.7% annualized yield at the cited share price.
• Neutral Sentiment: IBM maintained its full-year revenue outlook. The company continues to target 4%–5% constant-currency revenue growth, but investors wanted evidence that the software rebound can persist—particularly as Red Hat and delayed enterprise deals become increasingly important. IBM Falls as Analysts Question Software Rebound
• Negative Sentiment: Guidance and management commentary overshadowed the earnings beat. CEO Arvind Krishna’s comments that lower-cost open AI models can deliver most of the performance of frontier models raised concerns about customers’ willingness to spend heavily on AI infrastructure and services. A narrower-than-expected gross margin and the unchanged revenue outlook added to concerns that recent sales acceleration may not be sustainable. IBM Earnings Call Stock Reversal

About International Business Machines

International Business Machines Corporation NYSE: IBM, commonly known as IBM, is a global technology and consulting company that helps organizations modernize their information technology and business operations. Its offerings include hybrid cloud solutions, artificial intelligence software and services, enterprise software, IT infrastructure, cybersecurity, data analytics, and technology consulting.

IBM provides products and services to businesses, governments, and other institutions across industries and regions worldwide.