9/1/2023 0 Comments Ibm stock market watchIn this chart, we can see how these future growth prospects compare to the rest of the market and there are some stark contrasts here that indicate the true strength of the headwinds currently facing the company. Of course, these factors are not expected to match the modest rebound that is expected for IBM’s earnings figures but it is clear that there are reasons for concern in a number of different areas and the combination of each of these factors simply does not create a favorable outlook for investors. In addition to this, IBM’s revenue figures are expected to remain sluggish in 2021 and the company’s free cash flow figures are likely to encounter a sizable dip into the beginning of 2022. market (2.2x) and while IBM’s trend activity in this metric is clearly pointed in the downward direction it is still a factor that should send warning signals for investors hoping for a meaningful rebound in share prices.Īnd while IBM’s ROE figures might appear elevated at first glance (at just north or 37%), investors must remember that this figure is distorted because of the company’s significant debt levels. Needless to say, this is far greater than what we are seeing in the rest of the U.S. However, on the negative side, investors must understand that IBM trades with a weak outlook based on its PEG metric (1.7x) and the stock’s price-to-book value (5.4x) is above the rest of its elevated industry levels (currently holding at 5.1x). In this regard, we can also highlight modest expansion in IBM’s net profit margins, which have increased to 10.5% (from the company’s 10% reading last year). In addition to this, IBM’s PE ratio is even favorable relative to the broader market in the United States (which currently trades with a P/E ratio of 21.1x). IBM currently trades with a PE ratio of 14.6x and this is well below the PE ratio visible that’s present within the rest of the information technology sector (37.1x). On the positive side, we should note that IBM is currently showing attractive valuations based on its price-to-earnings metrics. With the sideways trading activity that we have seen in IBM stock since the middle of last year, it’s easy to understand why shareholders might have become frustrated with the stock and its limited potential for upside performance in 2021. Unfortunately, the reality seems to suggest that while IBM’s goals for the end of 2021 could mark the beginning of a new era for the company, we think that the growth outlook is likely to remain limited until we see clearer evidence that success in these programs has actually come to fruition.įor these reasons, we think that any upside surprises that might be seen in IBM’s upcoming earnings report are likely to have a limited impact on stock valuations and historical resistance levels near $150 could create headwinds for shareholders during the first half of 2021. and hybrid cloud goals, it’s clear that key risks remain with the stock trading at depressed levels that have failed to show much improvement since the beginning of the coronavirus pandemic. While bullish investors holding long positions in International Business Machines ( NYSE: IBM) might be maintaining a positive outlook based on the company’s plans to refocus the business on long-term A.I.
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