International Business Machines (NYSE:IBM) Stock Price Down 2.5% - Here's Why

Key Points

• IBM shares fell 2.5% on Friday, trading as low as $287.50 after closing at $295.30 the prior day, with volume below average.
• The company continues to draw attention for progress in quantum computing and enterprise AI, including new multi-agent software tools and modernization workflows, while IBM and Red Hat also commercialized the cybersecurity-related “Lightwell” product.
• Despite the pullback, several analysts remain bullish: IBM has a Moderate Buy consensus rating and an average price target of $306.28, though Susquehanna’s new $303 target suggests only modest upside ahead of Q2 earnings on July 22.

International Business Machines Corporation (NYSE:IBM - Get Free Report) shares traded down 2.5% on Friday . The stock traded as low as $287.50 and last traded at $287.85. 3,618,047 shares changed hands during mid-day trading, a decline of 50% from the average daily volume of 7,298,817 shares. The stock had previously closed at $295.30.

International Business Machines News Summary

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

• Positive Sentiment: IBM continues to get credit for progress in quantum computing and enterprise AI, including new multi-agent software development tools and modernization workflows that could support longer-term growth. IBM Advances Enterprise AI Software Development with Multi-Agent Capabilities and Specialized Modernization Workflows
• Positive Sentiment: IBM and Red Hat recently commercialized “Lightwell,” a cybersecurity-related launch that suggests the company is turning strategic AI and security investments into products customers can buy. IBM just answered a $5 billion cybersecurity question
• Neutral Sentiment: Susquehanna’s new coverage came with a $303 target, implying only modest upside from current levels and reinforcing a wait-and-see stance heading into IBM’s Q2 earnings on July 22. International Business Machines is now covered by Susquehanna
• Negative Sentiment: Sentiment has also been hurt by reports that Starbucks is building internal AI tools to replace vendor software from IBM, raising concerns that enterprise customers may try to reduce software spending over time. Starbucks Builds Sovereign AI to Cut $400 Million in Software Costs

Wall Street Analyst Weigh In

A number of brokerages recently issued reports on IBM. Needham & Company LLC began coverage on shares of International Business Machines in a research report on Wednesday, June 3rd. They set a "buy" rating on the stock. Barclays began coverage on shares of International Business Machines in a research report on Monday, June 1st. They issued an "overweight" rating and a $350.00 price target on the stock. Jefferies Financial Group assumed coverage on shares of International Business Machines in a report on Tuesday, June 23rd. They set a "buy" rating on the stock. DZ Bank raised shares of International Business Machines from a "hold" rating to a "buy" rating and set a $295.00 price objective for the company in a research report on Friday, April 24th. Finally, Royal Bank Of Canada reiterated an "outperform" rating on shares of International Business Machines in a research note on Tuesday, June 23rd. Sixteen analysts have rated the stock with a Buy rating and nine have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $306.28.

International Business Machines Price Performance

The stock has a market cap of $270.55 billion, a price-to-earnings ratio of 25.45, a P/E/G ratio of 2.92 and a beta of 0.68. The company has a debt-to-equity ratio of 1.75, a current ratio of 0.80 and a quick ratio of 0.76. The stock's 50 day simple moving average is $262.55 and its two-hundred day simple moving average is $266.02.

International Business Machines (NYSE:IBM - Get Free Report) last announced its quarterly earnings data on Wednesday, April 22nd. The technology company reported $1.91 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.81 by $0.10. International Business Machines had a net margin of 15.61% and a return on equity of 37.23%. The company had revenue of $15.92 billion during the quarter, compared to analysts' expectations of $15.60 billion. During the same quarter in the prior year, the company posted $1.60 EPS. The business's revenue was up 9.5% on a year-over-year basis. On average, analysts forecast that International Business Machines Corporation will post 12.45 earnings per share for the current fiscal year.

International Business Machines Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, June 10th. Shareholders of record on Friday, May 8th were paid a dividend of $1.69 per share. This is a positive change from International Business Machines's previous quarterly dividend of $1.68. This represents a $6.76 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date was Friday, May 8th. International Business Machines's dividend payout ratio is 59.77%.

Institutional Investors Weigh In On International Business Machines

Several large investors have recently modified their holdings of the stock. CVA Family Office LLC raised its stake in International Business Machines by 1.4% during the fourth quarter. CVA Family Office LLC now owns 2,389 shares of the technology company's stock worth $708,000 after acquiring an additional 33 shares in the last quarter. Foster Group Inc. boosted its stake in shares of International Business Machines by 1.3% in the 4th quarter. Foster Group Inc. now owns 2,507 shares of the technology company's stock valued at $742,000 after purchasing an additional 33 shares in the last quarter. New Covenant Trust Company N.A. boosted its stake in shares of International Business Machines by 3.8% in the 4th quarter. New Covenant Trust Company N.A. now owns 905 shares of the technology company's stock valued at $264,000 after purchasing an additional 33 shares in the last quarter. McGowan Group Asset Management Inc. grew its holdings in shares of International Business Machines by 1.2% in the 4th quarter. McGowan Group Asset Management Inc. now owns 2,693 shares of the technology company's stock worth $798,000 after purchasing an additional 33 shares during the last quarter. Finally, Sandbox Financial Partners LLC increased its position in shares of International Business Machines by 0.4% during the 4th quarter. Sandbox Financial Partners LLC now owns 8,969 shares of the technology company's stock worth $2,657,000 after purchasing an additional 34 shares in the last quarter. 58.96% of the stock is currently owned by institutional investors.

International Business Machines Company Profile

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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