Erste Group Bank Has Negative Outlook of IBM FY2027 Earnings

Key Points

• Erste Group Bank trimmed its FY2027 EPS estimate for IBM to $13.41 from $13.46, while keeping a Hold rating on the stock. Its forecast remains above the current consensus estimate of $12.40 per share.
• IBM’s latest quarterly results beat expectations, posting $1.91 EPS on $15.92 billion in revenue, both above analyst estimates. Revenue rose 9.5% year over year, and the company also reported strong profitability metrics.
• IBM’s shares were down 1.7% in Thursday trading, even as the company continued to draw generally positive analyst sentiment and recently raised its quarterly dividend to $1.69 per share.

International Business Machines Corporation (NYSE:IBM - Free Report) - Stock analysts at Erste Group Bank decreased their FY2027 earnings per share (EPS) estimates for shares of International Business Machines in a note issued to investors on Friday, June 5th. Erste Group Bank analyst H. Engel now forecasts that the technology company will post earnings per share of $13.41 for the year, down from their prior forecast of $13.46. Erste Group Bank has a "Hold" rating on the stock. The consensus estimate for International Business Machines' current full-year earnings is $12.40 per share.

International Business Machines (NYSE:IBM - Get Free Report) last released its earnings results on Wednesday, April 22nd. The technology company reported $1.91 EPS for the quarter, topping analysts' consensus estimates of $1.81 by $0.10. International Business Machines had a return on equity of 37.23% and a net margin of 15.61%.The company had revenue of $15.92 billion for the quarter, compared to the consensus estimate of $15.60 billion. During the same quarter last year, the business posted $1.60 EPS. International Business Machines's quarterly revenue was up 9.5% compared to the same quarter last year.

IBM has been the topic of a number of other research reports. BMO Capital Markets reduced their target price on International Business Machines from $290.00 to $270.00 and set a "market perform" rating on the stock in a report on Thursday, April 23rd. Roth Mkm reaffirmed a "buy" rating on shares of International Business Machines in a report on Wednesday, June 3rd. Morgan Stanley increased their target price on International Business Machines from $215.00 to $225.00 and gave the stock an "equal weight" rating in a report on Thursday, April 23rd. Wedbush set a $350.00 target price on International Business Machines in a report on Tuesday, June 2nd. Finally, Weiss Ratings raised International Business Machines from a "hold (c+)" rating to a "buy (b-)" rating in a report on Tuesday. One analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and seven have given a Hold rating to the company. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $304.17.

International Business Machines Trading Down 1.7%

NYSE:IBM opened at $272.78 on Thursday. The company has a quick ratio of 0.76, a current ratio of 0.80 and a debt-to-equity ratio of 1.75. The business's 50 day moving average is $248.79 and its two-hundred day moving average is $270.49. International Business Machines has a 52 week low of $212.34 and a 52 week high of $332.46. The company has a market cap of $256.38 billion, a PE ratio of 24.12, a P/E/G ratio of 2.87 and a beta of 0.67.

Institutional Trading of International Business Machines

Hedge funds have recently made changes to their positions in the stock. Basepoint Wealth LLC bought a new stake in shares of International Business Machines in the 4th quarter worth approximately $25,000. Family CFO Inc acquired a new stake in International Business Machines in the 4th quarter valued at approximately $25,000. Joseph Group Capital Management acquired a new stake in International Business Machines in the 4th quarter valued at approximately $28,000. Cornerstone Financial Management LLC acquired a new stake in International Business Machines in the 4th quarter valued at approximately $28,000. Finally, SWAN Capital LLC acquired a new stake in International Business Machines in the 3rd quarter valued at approximately $28,000. Institutional investors own 58.96% of the company's stock.

International Business Machines Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, June 10th. Investors of record on Friday, May 8th were issued a $1.69 dividend. This is a positive change from International Business Machines's previous quarterly dividend of $1.68. The ex-dividend date of this dividend was Friday, May 8th. This represents a $6.76 annualized dividend and a dividend yield of 2.5%. International Business Machines's dividend payout ratio (DPR) is 59.77%.

Key International Business Machines News

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

• Positive Sentiment: Jim Cramer publicly favored IBM over Xanadu Quantum, saying investors should “buy IBM” if they want exposure to the quantum theme, which can reinforce confidence in IBM as a more credible and profitable long-term AI/quantum name. Jim Cramer Recommends IBM Over Xanadu Quantum
• Positive Sentiment: IBM announced an expanded global collaboration with JA Worldwide to deliver AI and digital-skills education to up to one million high-school students, highlighting IBM’s efforts to build ecosystem adoption and strengthen its brand in AI. JA Worldwide and IBM Expand Global Collaboration with Goal of Delivering AI and Digital Skills to Up to One Million High-School Students
• Positive Sentiment: Several articles framed IBM as a strong long-term beneficiary of the quantum-computing boom, including coverage that described IBM as a “safer play” alongside Alphabet in the sector and another piece calling IBM a long-term buy tied to its recurring-revenue software and infrastructure engine. Quantum Computing Looks Like Nvidia in 2019. This Could Be the Generational Buy of the Decade.
• Neutral Sentiment: IBM CEO Arvind Krishna’s recent comments on quantum advantage, AI usage, and the company’s profit strategy keep IBM in the AI/quantum conversation, but the remarks were more strategic than immediately financial. IBM CEO Krishna on Quantum Advantage, Profit Strategy
• Neutral Sentiment: One analyst-style article argued that Celestica may be a better AI infrastructure buy than IBM due to faster growth and a cheaper valuation, which is a reminder that IBM still faces competition for investor capital in AI hardware/infrastructure. Celestica vs. IBM: Which AI Infrastructure Stock is the Better Buy?
• Negative Sentiment: Recent 247WallSt commentary said IBM has already rallied enough that some investors may prefer to wait for a pullback, and it also noted the stock is not cheap after IBM’s large quantum investment announcement. IBM Just Placed a $10 Billion Bet to Become the Nvidia of Quantum Computing

About International Business Machines

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM's principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.

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