Earnings Beat: Drexel Hamilton Weighs In on International Business Machines Corp. (IBM)


In a research report published Friday, Drexel Hamilton analyst Brian White reiterated a Buy rating on shares of International Business Machines Corp. (NYSE:IBM), with a price target of $186, after the tech giant delivered revenue upside in 4Q:16 and guided for EPS growth to return in 2017. Shares of IBM are currently trading at $169.65, up $2.84 or +1.70%.

White stated, “After big revenue misses prior to 2016, IBM delivered the fourth consecutive quarter of revenue upside. That said, the company continues to aggressively invest back into next generation areas of technology that depressed 4Q:16 operating profits relative to our projections but this drove strong revenue momentum in IBM’s strategic imperatives portfolio. As such, we believe IBM is creating the foundation for better trends over the next 12-18 months. We expect to hear more about Watson, the cloud, Blockchain and more at the company’s analyst meeting in March.”

“Although we are lowering our 2017 EPS estimate (we were well above the Street), we believe the worst is over for IBM with the sales cycle (and operating profit cycle) having bottomed and now annual EPS appears poised for growth for the first time since 2013,” the analyst concludes.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian White has a yearly average return of 8.3% and a 58% success rate. White has an 2.1% average return when recommending IBM, and is ranked #226 out of 4365 analysts.

Out of the 21 analysts polled by TipRanks, 5 rate International Business Machines stock a Buy, 13 rate the stock a Hold and 3 recommend Sell. With a downside potential of 6.0%, the stock’s consensus target price stands at $158.94.

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