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Headquartered in Armonk, New York, International Business Machines Corporation (IBM) is a global IT powerhouse with a market cap of $205.9 billion. Renowned for its innovations in artificial intelligence, cloud computing, and enterprise technologies, IBM provides a diverse suite of services, software, and hardware that help businesses transform and streamline their operations. The company will announce its Q4 earnings after the market closes on Wednesday, Jan. 29.
Ahead of the event, analysts predict IBM’s bottom line will decline 3.4% year over year to $3.74 per share. On the bright side, the company has surpassed Wall Street’s EPS estimates in its last four quarterly reports. Its adjusted earnings of $2.30 per share for the last quarter surpassed the consensus estimate by 1.3%, driven by acceleration in the Red Hat business.
For fiscal 2024, analysts expect IBM to report EPS of $10.16, up 5.6% from $9.62 in fiscal 2023.
Over the past year, IBM stock has gained 39.9%, outperforming the broader S&P 500 Index's ($SPX) 27.2% gains and the Vanguard Information Technology ETF’s (VGT) 38.8% returns over the same time frame.
IBM has outpaced the broader market over the past year, fueled by the success of its decade-long strategic shift toward AI and enterprise-class services. The company's focus on meeting rising demand for advanced AI solutions has positioned it as a leader in the space, driving its strong performance and market gains.
IBM announced its Q3 results on Oct. 23, reporting adjusted earnings per share of $2.30 that beat estimates. However, the stock dropped 6.2% the following trading session due to weaker-than-expected revenue of $15 billion, impacted by reduced enterprise spending and a focus on generative AI projects.
The consensus opinion on IBM stock is cautious, with an overall “Hold” rating. Of 16 analysts covering the stock, four advise a “Strong Buy” rating, one suggests a “Moderate Buy,” nine suggest a “Hold,” and two advise a “Strong Sell.”
IBM's average analyst price target is $226.12, which implies a marginal upswing from prevailing market prices.
