In the latest trading session, IBM (IBM) closed at $128.89, marking a -0.12% move from the previous day. This change was narrower than the S&P 500's daily loss of 0.34%. Elsewhere, the Dow gained 0.05%, while the tech-heavy Nasdaq lost 0.69%.
IBM will be looking to display strength as it nears its next earnings release. In that report, analysts expect IBM to post earnings of $2.14 per share. This would mark a year-over-year decline of 32.49%. Our most recent consensus estimate is calling for quarterly revenue of $17.72 billion, down 7.52% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $11.29 per share and revenue of $72.98 billion, which would represent changes of -11.87% and -5.4%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. IBM currently has a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 11.43 right now. This represents a discount compared to its industry's average Forward P/E of 12.33.
Also, we should mention that IBM has a PEG ratio of 3.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Integrated Systems was holding an average PEG ratio of 3.35 at yesterday's closing price.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 192, putting it in the bottom 25% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.
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