International Business Machines (NYSE:IBM) Trading 12.5% Higher - Still a Buy?

Key Points

• IBM shares jumped 12.5% after news that it and the U.S. Department of Commerce plan to create America’s first purpose-built quantum foundry, backed by a proposed $1 billion CHIPS award and a matching IBM commitment.
• The rally was also fueled by broader government support for quantum computing, including a reported $2 billion investment across nine quantum firms, which has reinforced IBM’s status as a leading quantum-play stock.
• IBM’s recent fundamentals were solid: the company beat quarterly earnings and revenue expectations, and it also raised its quarterly dividend slightly to $1.69 per share, lifting the annualized yield to about 2.7%.

Shares of International Business Machines Corporation (NYSE:IBM - Get Free Report) traded up 12.5% during mid-day trading on Thursday . The stock traded as high as $253.63 and last traded at $253.1360. 25,286,827 shares changed hands during mid-day trading, an increase of 310% from the average session volume of 6,172,559 shares. The stock had previously closed at $225.00.

More International Business Machines News

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

• Positive Sentiment: IBM and the U.S. Department of Commerce announced a Letter of Intent to create America’s first purpose-built quantum foundry, with IBM’s new venture “Anderon” expected to receive a proposed $1 billion CHIPS award and a matching $1 billion IBM commitment. Investors are reacting to the scale of the support and the potential for IBM to become a key supplier in the emerging quantum ecosystem. Article title: IBM and U.S. Department of Commerce Announce America's First Purpose-Built Quantum Foundry, Supported by Proposed $1 Billion CHIPS Award
• Positive Sentiment: The U.S. government’s broader plan to invest $2 billion across nine quantum computing companies is lifting IBM along with other quantum names, reinforcing the market view that quantum computing is becoming a strategic national priority. Article title: US to invest $2 billion in IBM, other quantum computing firms
• Positive Sentiment: Analysts and traders are framing IBM as a leading “quantum play,” and unusual options activity suggests speculation is building around further upside if the foundry project advances and attracts more commercial demand. Article title: Traders think this legacy tech stock is the ultimate quantum play

Analyst Ratings Changes

Several equities analysts recently issued reports on the stock. Erste Group Bank lowered shares of International Business Machines from a "buy" rating to a "hold" rating in a report on Wednesday, February 18th. Evercore boosted their target price on shares of International Business Machines from $330.00 to $345.00 and gave the company an "outperform" rating in a report on Thursday, January 29th. BMO Capital Markets dropped their target price on shares of 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. HSBC upgraded shares of International Business Machines from a "reduce" rating to a "hold" rating and boosted their target price for the company from $218.00 to $231.00 in a report on Tuesday, April 28th. Finally, Citigroup assumed coverage on shares of International Business Machines in a report on Friday, April 10th. They issued a "buy" rating and a $285.00 target price on the stock. One equities research analyst has rated the stock with a Strong Buy rating, twelve have issued a Buy rating and seven have given a Hold rating to the company's stock. According to data from MarketBeat, International Business Machines presently has a consensus rating of "Moderate Buy" and a consensus target price of $294.41.

International Business Machines Stock Up 12.5%

The firm's fifty day moving average price is $238.52 and its two-hundred day moving average price is $272.95. The stock has a market cap of $237.92 billion, a price-to-earnings ratio of 22.38, a price-to-earnings-growth ratio of 2.30 and a beta of 0.58. The company has a debt-to-equity ratio of 1.75, a current ratio of 0.80 and a quick ratio of 0.76.

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 for the quarter, beating the consensus estimate 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 firm had revenue of $15.92 billion for the quarter, compared to analyst estimates of $15.60 billion. During the same quarter in the prior year, the business earned $1.60 earnings per share. The business's quarterly revenue was up 9.5% compared to the same quarter last year. Sell-side analysts forecast that International Business Machines Corporation will post 12.4 earnings per share for the current fiscal year.

International Business Machines Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, June 10th. Stockholders of record on Friday, May 8th will be issued a dividend of $1.69 per share. This is an increase from International Business Machines's previous quarterly dividend of $1.68. This represents a $6.76 annualized dividend and a dividend yield of 2.7%. The ex-dividend date is Friday, May 8th. International Business Machines's dividend payout ratio (DPR) is currently 59.77%.

Insider Buying and Selling at International Business Machines

In related news, Director Michael Miebach acquired 434 shares of the company's stock in a transaction dated Wednesday, February 25th. The shares were purchased at an average price of $233.33 per share, for a total transaction of $101,265.22. Following the completion of the acquisition, the director owned 434 shares of the company's stock, valued at approximately $101,265.22. This trade represents a ∞ increase in their ownership of the stock. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Corporate insiders own 0.27% of the company's stock.

Institutional Investors Weigh In On International Business Machines

Hedge funds and other institutional investors have recently made changes to their positions in the business. Basepoint Wealth LLC bought a new stake in shares of International Business Machines during the fourth quarter worth about $25,000. Family CFO Inc bought a new stake in shares of International Business Machines during the fourth quarter worth about $25,000. Joseph Group Capital Management bought a new stake in shares of International Business Machines during the fourth quarter worth about $28,000. Cornerstone Financial Management LLC bought a new stake in shares of International Business Machines during the fourth quarter worth about $28,000. Finally, SWAN Capital LLC bought a new stake in shares of International Business Machines during the third quarter worth about $28,000. 58.96% of the stock is owned by institutional investors.

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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