International Business Machines (NYSE:IBM) Shares Up 2.8% - Still a Buy?

Key Points

• IBM shares rose 2.8% to about $226.70 amid elevated trading volume, while the stock remains below its 50-day and 200-day moving averages.
• IBM advanced to the final stage of DARPA’s quantum-computing benchmark initiative, strengthening its credibility and prospects in quantum technology. Analysts view the valuation as more attractive if AI and consulting growth recover.
• Investors remain cautious ahead of the October 21 earnings report following delayed large deals and modest prior-quarter revenue growth. Wall Street’s consensus rating is “Moderate Buy”, with an average price target of $253.52, while IBM offers a 3.0% dividend yield.

International Business Machines Corporation (NYSE:IBM - Get Free Report)'s share price traded up 2.8% during mid-day trading on Thursday. The stock traded as high as $227.31 and last traded at $226.6990. Approximately 8,639,919 shares were traded during trading, an increase of 14% from the average session volume of 7,558,105 shares. The stock had previously closed at $220.51.

Trending Headlines about International Business Machines

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

• Positive Sentiment: IBM advanced to Stage C, the final phase of the Defense Advanced Research Projects Agency’s Quantum Benchmarking Initiative. Independent experts will evaluate IBM’s quantum hardware, architecture and systems engineering, providing a significant credibility boost to its plan to develop a fault-tolerant quantum computer by 2029. IBM Gets Defense Dept. Quantum Stamp of Approval
• Positive Sentiment: The DARPA milestone strengthens IBM’s position in the emerging quantum-computing market and may improve investor confidence in future commercial and government opportunities. IBM is targeting industrially useful, fault-tolerant quantum computing before DARPA’s broader 2033 objective. IBM enters DARPA testing phase for fault-tolerant quantum computing
• Positive Sentiment: Analysts and market commentary describe IBM’s valuation as increasingly attractive after its recent decline, particularly if growth in AI and consulting rebounds. IBM also introduced a joint SAP cloud ERP offering intended to help midsize businesses modernize operations and prepare for AI adoption. IBM’s Valuation is Getting Interesting as AI and Consulting Rebound
• Neutral Sentiment: IBM and Red Hat reported remediating more than 400 previously unknown open-source vulnerabilities through their Lightwell initiative. The announcement supports IBM’s cybersecurity and open-source credentials but is unlikely to materially affect near-term financial results.
• Negative Sentiment: 11:11 Systems acquired select IBM VMware Cloud Service Provider enterprise customers, indicating some customer attrition in IBM’s VMware-related cloud services. The transaction appears limited in scope, but it highlights competitive pressure in hybrid cloud and managed infrastructure. 11:11 Systems Acquires Select IBM VMware Cloud Service Provider Enterprise Customers
• Negative Sentiment: Investors remain cautious ahead of IBM’s October 21 third-quarter earnings report. The prior quarter missed revenue expectations after large deals were delayed, and the stock’s recent underperformance has kept concerns about a prolonged growth slowdown in focus. What Happens To IBM Stock If Its Slowdown Lasts?

Wall Street Analysts Forecast Growth

IBM has been the topic of a number of analyst reports. Citigroup dropped their target price on International Business Machines from $255.00 to $245.00 and set a "buy" rating on the stock in a research report on Friday, July 24th. Barclays lowered their price objective on International Business Machines from $288.00 to $262.00 and set an "overweight" rating for the company in a research note on Thursday, July 23rd. Evercore dropped their price objective on International Business Machines from $310.00 to $250.00 and set an "outperform" rating on the stock in a report on Thursday, July 16th. Oppenheimer lowered International Business Machines from an "outperform" rating to a "market perform" rating in a research report on Wednesday, July 15th. Finally, Argus decreased their price target on shares of International Business Machines from $360.00 to $280.00 and set a "buy" rating for the company in a research report on Thursday, July 16th. Eighteen research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $253.52.

International Business Machines Trading Up 2.8%

The company has a debt-to-equity ratio of 1.63, a current ratio of 0.79 and a quick ratio of 0.74. The business's fifty day simple moving average is $232.14 and its 200 day simple moving average is $244.23. The stock has a market cap of $213.58 billion, a price-to-earnings ratio of 20.12, a P/E/G ratio of 2.11 and a beta of 0.73.

International Business Machines (NYSE:IBM - Get Free Report) last issued its earnings results on Wednesday, July 22nd. The technology company reported $2.93 earnings per share for the quarter, hitting analysts' consensus estimates of $2.93. International Business Machines had a net margin of 15.52% and a return on equity of 35.65%. The company had revenue of $17.16 billion for the quarter, compared to analysts' expectations of $17.46 billion. During the same period in the prior year, the company earned $2.80 earnings per share. The firm's revenue was up 1.1% compared to the same quarter last year. On average, research analysts predict that International Business Machines Corporation will post 12.33 EPS for the current year.

International Business Machines Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, September 10th. Shareholders of record on Monday, August 10th were issued a $1.69 dividend. The ex-dividend date of this dividend was Monday, August 10th. This represents a $6.76 dividend on an annualized basis and a yield of 3.0%. International Business Machines's dividend payout ratio (DPR) is currently 59.98%.

Insider Buying and Selling

In other news, SVP Robert Thomas sold 25,000 shares of the company's stock in a transaction that occurred on Wednesday, August 26th. The stock was sold at an average price of $230.32, for a total transaction of $5,758,000.00. Following the completion of the transaction, the senior vice president directly owned 47,800 shares of the company's stock, valued at approximately $11,009,296. This represents a 34.34% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. 0.27% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. bought a new position in shares of International Business Machines during the second quarter worth about $21,586,659,000. State Street Corp boosted its stake in International Business Machines by 2.7% during the 2nd quarter. State Street Corp now owns 56,045,055 shares of the technology company's stock valued at $15,760,430,000 after purchasing an additional 1,450,562 shares during the period. Bank of America Corp DE boosted its stake in International Business Machines by 7.0% during the 1st quarter. Bank of America Corp DE now owns 16,063,653 shares of the technology company's stock valued at $3,893,669,000 after purchasing an additional 1,049,602 shares during the period. Bank of New York Mellon Corp bought a new position in International Business Machines in the 2nd quarter worth about $2,606,782,000. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its stake in shares of International Business Machines by 0.7% in the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 7,621,512 shares of the technology company's stock valued at $2,143,245,000 after purchasing an additional 53,388 shares during the period. Institutional investors and hedge funds own 58.96% of the company's stock.

About International Business Machines

International Business Machines Corporation NYSE: IBM, commonly known as IBM, is a global technology company that provides hybrid cloud, artificial intelligence, software, consulting and infrastructure solutions. Its offerings help businesses and government organizations manage data, modernize applications, automate processes and improve cybersecurity.

IBM's portfolio includes the Red Hat hybrid cloud platform, the watsonx suite of artificial intelligence and data tools, consulting services, and enterprise software for areas such as automation, application management, security and asset management.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.