International Business Machines (NYSE:IBM) Shares Down 2% After Analyst Downgrade

Key Points

• Shares fell about 2% after Erste Group downgraded IBM from a buy to a hold; the stock traded as low as $253.51 with volume roughly 7% below the average session.
• Analyst sentiment remains a Moderate Buy consensus with an average price target of $330.07, although individual targets range roughly from $317 to $380 and ratings vary widely.
• IBM posted an earnings beat (EPS $4.52 vs. $4.33; revenue $19.69B vs. $19.23B, +12.2% YoY) and declared a $1.68 quarterly dividend (2.6% yield; ex-dividend Feb 10).

International Business Machines Corporation (NYSE:IBM - Get Free Report)'s share price fell 2% on Thursday after Erste Group Bank downgraded the stock from a buy rating to a hold rating. The stock traded as low as $253.51 and last traded at $255.6530. 4,942,053 shares were traded during trading, a decline of 7% from the average session volume of 5,338,423 shares. The stock had previously closed at $260.79.

A number of other analysts have also issued reports on the company. BMO Capital Markets reissued a "market perform" rating and issued a $350.00 price target on shares of International Business Machines in a research note on Thursday, January 29th. Oppenheimer set a $380.00 target price on shares of International Business Machines and gave the stock an "outperform" rating in a research report on Thursday, January 29th. Weiss Ratings restated a "buy (b)" rating on shares of International Business Machines in a report on Thursday, January 22nd. Jefferies Financial Group increased their price target on shares of International Business Machines from $360.00 to $370.00 and gave the stock a "buy" rating in a research note on Thursday, January 29th. Finally, UBS Group set a $317.00 price objective on shares of International Business Machines in a research note on Thursday, January 29th. One analyst has rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average target price of $330.07.

Insider Buying and Selling

In related news, Director David N. Farr acquired 1,000 shares of International Business Machines stock in a transaction on Friday, January 30th. The shares were bought at an average price of $304.00 per share, for a total transaction of $304,000.00. Following the completion of the purchase, the director directly owned 9,258 shares in the company, valued at $2,814,432. This trade represents a 12.11% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. 0.18% of the stock is owned by company insiders.

Hedge Funds Weigh In On International Business Machines

Institutional investors and hedge funds have recently bought and sold shares of the stock. Basepoint Wealth LLC acquired a new stake in International Business Machines during the 4th quarter valued at $25,000. Family CFO Inc purchased a new position in International Business Machines in the 4th quarter valued at about $25,000. Winnow Wealth LLC acquired a new stake in shares of International Business Machines during the second quarter valued at about $27,000. Joseph Group Capital Management purchased a new stake in shares of International Business Machines during the fourth quarter worth about $28,000. Finally, Cornerstone Financial Management LLC acquired a new position in shares of International Business Machines in the fourth quarter worth about $28,000. Hedge funds and other institutional investors own 58.96% of the company's stock.

International Business Machines Stock Performance

The firm has a market cap of $238.97 billion, a price-to-earnings ratio of 22.93, a PEG ratio of 2.59 and a beta of 0.69. The company has a quick ratio of 0.92, a current ratio of 0.96 and a debt-to-equity ratio of 1.67. The company has a 50 day moving average of $296.22 and a 200 day moving average of $284.16.

International Business Machines (NYSE:IBM - Get Free Report) last posted its quarterly earnings data on Wednesday, January 28th. The technology company reported $4.52 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.33 by $0.19. The company had revenue of $19.69 billion for the quarter, compared to the consensus estimate of $19.23 billion. International Business Machines had a return on equity of 38.15% and a net margin of 15.69%.International Business Machines's revenue for the quarter was up 12.2% compared to the same quarter last year. During the same period in the previous year, the business earned $3.92 EPS. As a group, equities research analysts expect that International Business Machines Corporation will post 10.78 EPS for the current fiscal year.

International Business Machines Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 10th. Shareholders of record on Tuesday, February 10th will be issued a dividend of $1.68 per share. This represents a $6.72 annualized dividend and a yield of 2.6%. The ex-dividend date of this dividend is Tuesday, February 10th. International Business Machines's dividend payout ratio (DPR) is currently 60.27%.

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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