Here’s how investors should make decisions about buying, holding or selling International Business Machines Corporation (NYSE:IBM) stock. On Friday, shares of International Business Machines Corporation (NYSE:IBM) closed higher after an active session. The shares accumulated 0.52 points or 0.39 percent at $133.71 with a light trade volume of 3.139 million shares. After opening the session at $132.34, the shares went as high as $133.71 and as low as $132.19, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $122 billion and now has 911.2 million shares outstanding. International Business Machines Corporation (IBM) stock has gained 10.79 percent of market value in 21 trading days.
IBM stock has a trailing 3-year beta of 1.23, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $11.77 a share in the trailing twelve months. The stock’s value has surged 17.63 percent year to date (YTD) against a decline of -13.09 percent in 12 month’s time. The company’s shares still trade -17.52 percent away from its 1-year high of $162.11 and 26.21 percent up from 52-week low of $105.94. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.
International Business Machines Corporation (IBM) will probably climb 5.65 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $165 price as 12-month high target. This represents a whopping 23.4 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $140, which represents a return potential of 4.7 percent when compared to the closing price of the stock of $133.71 on Friday, February 08. The lowest price target for the stock is $115 — slightly more than -13.99 percent from IBM’s current share price.
History has shown that shares in International Business Machines Corporation have gone down on 26 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of IBM’s Q1 earnings on April 16. Analysts are forecasting revenue to suffer decline of -2.7 percent to $18.6B in the fiscal first quarter, while earnings are seen soaring by nearly -8.98 percent to $2.23 per share. It earned $4.87 per share, better than the $4.82, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $21.8B, better than the $21.7B analysts expected. Earnings are estimated to increase by -3.3 percent this year, 1.85 percent next year and continue to increase by 0.96 percent annually for the next 5 years.
Let’s take a look at some insider activity at International Business Machines Corporation (NYSE:IBM) and see the pattern. The earliest insider trade took place on 02/06/2019. Gherson Diane J parted with a total of 5.75 thousand shares of company at average share price of $135.67. The total for the sales was set at $780.65 thousand. After this transaction, the Senior Vice President account balance stood at 20.27 thousand shares. The stock lost -1.44 percent since that insider sale. On 11/02/2018, Rometty Virginia M, Chairman, Pres. and CEO, purchased 8.5 thousand shares at a price per share of $117.51. This added 998.84 thousand shares to the insider’s fortune and the stock saw a 13.79 percent rally in value since the news became public. This transaction left 251.9 thousand shares in the Chairman, Pres. and CEO account.
On 11/01/2018, Director Swedish Joseph performed a purchase transaction worth $232.84 thousand. This purchase at $116.42 each has added 2 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 14.85 percent increase since the transaction was reported. The insider now is left with 3.26 thousand shares remaining in the account. Waddell Frederick H, who performs the Director job, bought 2.15 thousand shares for $249.73 thousand. The acquisition occurred on 11/01/2018 was priced at $115.99 per share. The share price soared 15.28 percent since the reporting date. Waddell Frederick H now left with a stake of 2.76 thousand IBM stock worth $369.44 thousand after the insider buying.
The stock is currently hovering around the first support level of $132.7. Below this, the next support is placed in the zone of $131.68. Till the time, the IBM stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 63.66 on daily chart, which may remain a cause for concern. If the price breaks below $131.68 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $134.22 mark may result into a pull-back move towards $134.72 level.
Shares of International Business Machines Corporation (IBM) are trading at a P/E ratio of 11.36 times earnings reported for the past 12 months. The industry IBM operates in has an average P/E of 20.98. Its P/E ratio went as low as 9.68X and as high as 13.39 over the 5-year span.Further, it is sporting a 1.53 on the Price-to-Sales ratio. Compare this with the industry average P/S of 400.15. 46.4 percent is the gross profit margin for International Business Machines Corporation and operating margin sits at 14.4 percent. Along with this, the net profit margin is 7.2 percent.