Equities Analysts Offer Predictions for IBM FY2027 Earnings

Key Points

• Erste Group raised IBM’s FY2027 EPS forecast to $13.40 from $13.13, above the current consensus estimate of $12.34 per share.
• Analyst sentiment remains favorable but mixed: IBM has a consensus “Moderate Buy” rating from 34 analysts and an average price target of $266.12, despite several recent target cuts and one downgrade.
• IBM recently exceeded quarterly expectations, reporting $2.95 in EPS and $17.10 billion in revenue, while declaring a quarterly dividend of $1.69 per share, representing a 2.7% yield.

International Business Machines Corporation (NYSE:IBM - Free Report) - Erste Group Bank lifted their FY2027 earnings per share (EPS) estimates for International Business Machines in a research note issued to investors on Wednesday, October 21st. Erste Group Bank analyst H. Engel now forecasts that the technology company will post earnings of $13.40 per share for the year, up from their previous estimate of $13.13. The consensus estimate for International Business Machines' current full-year earnings is $12.34 per share.

Several other analysts also recently commented on the company. Daiwa Securities Group reduced their target price on International Business Machines from $247.00 to $217.00 and set a "neutral" rating for the company in a research note on Wednesday, July 29th. HSBC reduced their price objective on International Business Machines from $175.00 to $174.00 in a research note on Friday, July 24th. Susquehanna boosted their price objective on International Business Machines from $235.00 to $256.00 and gave the company a "neutral" rating in a report on Wednesday. Citigroup upped their target price on International Business Machines from $245.00 to $280.00 and gave the stock a "buy" rating in a research report on Thursday. Finally, Oppenheimer cut International Business Machines from an "outperform" rating to a "market perform" rating in a report on Wednesday, July 15th. Twenty investment 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. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $266.12.

International Business Machines Trading Up 0.4%

IBM opened at $252.42 on Friday. International Business Machines has a 1-year low of $199.19 and a 1-year high of $332.46. The company has a current ratio of 0.79, a quick ratio of 0.74 and a debt-to-equity ratio of 1.63. The company has a market cap of $237.81 billion, a P/E ratio of 22.40, a price-to-earnings-growth ratio of 2.42 and a beta of 0.73. The company has a fifty day moving average price of $232.68 and a two-hundred day moving average price of $243.63.

International Business Machines (NYSE:IBM - Get Free Report) last released its earnings results on Wednesday, October 21st. The technology company reported $2.95 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.85 by $0.10. The company had revenue of $17.10 billion for the quarter, compared to the consensus estimate of $16.82 billion. International Business Machines had a net margin of 15.99% and a return on equity of 35.08%. International Business Machines's quarterly revenue was up 4.7% compared to the same quarter last year. During the same quarter in the previous year, the company earned $2.65 EPS.

International Business Machines Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Tuesday, November 10th will be issued a dividend of $1.69 per share. This represents a $6.76 dividend on an annualized basis and a yield of 2.7%. The ex-dividend date of this dividend is Tuesday, November 10th. International Business Machines's payout ratio is currently 59.98%.

Insider Buying and Selling

In other news, SVP Robert Thomas sold 25,000 shares of the stock in a transaction that occurred on Wednesday, August 26th. The stock was sold at an average price of $230.32, for a total value of $5,758,000.00. Following the completion of the sale, the senior vice president directly owned 47,800 shares of the company's stock, valued at $11,009,296. This represents a 34.34% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Corporate insiders own 0.27% of the company's stock.

Institutional Investors Weigh In On International Business Machines

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Assetmark Inc. increased its position in International Business Machines by 24.8% in the first quarter. Assetmark Inc. now owns 64,458 shares of the technology company's stock worth $15,624,000 after buying an additional 12,791 shares during the last quarter. Flputnam Investment Management Co. purchased a new position in shares of International Business Machines during the 2nd quarter valued at $15,237,000. Beacon Investment Advisory Services Inc. lifted its position in shares of International Business Machines by 939.4% during the 2nd quarter. Beacon Investment Advisory Services Inc. now owns 30,495 shares of the technology company's stock valued at $8,575,000 after buying an additional 27,561 shares during the last quarter. St. Louis Financial Planners Asset Management LLC increased its holdings in International Business Machines by 34.6% in the 2nd quarter. St. Louis Financial Planners Asset Management LLC now owns 14,234 shares of the technology company's stock worth $4,121,000 after acquiring an additional 3,659 shares during the last quarter. Finally, Evercore Wealth Management LLC raised its stake in International Business Machines by 9.0% in the 1st quarter. Evercore Wealth Management LLC now owns 62,801 shares of the technology company's stock valued at $15,222,000 after acquiring an additional 5,196 shares during the period. 58.96% of the stock is owned by hedge funds and other institutional investors.

Key International Business Machines News

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

• Positive Sentiment: Quarterly results exceeded expectations. IBM reported adjusted earnings of $2.95 per share versus an approximately $2.85–$2.88 consensus, while revenue rose 4.7% year over year to $17.10 billion, ahead of the roughly $16.82 billion estimate. Net income increased to $2.19 billion from $1.74 billion a year earlier. IBM third-quarter results
• Positive Sentiment: Software growth rebounded. Software revenue growth accelerated to 9% at constant currency from 5% in the second quarter, supported by Red Hat, transaction processing and the Confluent acquisition. Infrastructure revenue also grew, helped by the return of previously delayed contracts. IBM software growth article
• Positive Sentiment: Cash-flow outlook improved. IBM raised its full-year free-cash-flow outlook, expecting growth of more than $1 billion from the prior year. Third-quarter free cash flow was approximately $3 billion, up about $700 million year over year. The company also declared a quarterly dividend of $1.69 per share. IBM free-cash-flow outlook
• Neutral Sentiment: Analysts raised targets. JPMorgan, RBC, Stifel and other firms increased their IBM price targets following the results, reflecting improved confidence in software execution and cash generation.
• Negative Sentiment: Growth durability remains a concern. IBM maintained its full-year constant-currency revenue-growth forecast of 4% to 5%, and management’s outlook suggests a slower fourth quarter. Investors are also questioning how much of the software acceleration came from Confluent rather than underlying organic growth. Reuters report on IBM software rebound
• Negative Sentiment: Valuation and AI commentary temper the response. IBM trades at a premium valuation despite modest overall growth, while CEO Arvind Krishna’s comments that lower-cost open AI models may deliver comparable performance raised questions about enterprise AI spending and future monetization.

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.

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