#1 - International Business Machines Corp. (NYSE:IBM)
International Business Machines Corp. (NYSE: IBM) - The problem: Call it a case of mistaken identity
IBM is attempting to reinvent itself by shifting to what the company is calling their “Strategic Imperatives” group. This is expected to allow the company to take advantage of the rapidly growing trend towards security services as a global corporate priority. A recent Goldman Sachs survey of chief information officers forecast that 45% were anticipating spending more on security-related services in the next 12 months. At first glance, their pivot appears to be working. In their most recent earnings statement, Big Blue reported that security revenue was up 79% a year ago and now tops $1 billion.
Analysts, however, have some concerns. For starters, IBM does not separate security revenue as a separate entity from their other business segments. In the second quarter that meant that much of their growth in Strategic Imperatives revenue was driven by their mainframe and Unix hardware. And even though IBM’s security business reported $3.4 billion growth in year-over-year revenue, it is a small fraction of the company’s total revenue that tops $19 billion. It’s never easy to turn a battleship, and the odds of IBM being able to do this look iffy.
IBM is currently trading at around $145 per share, down from its 52-week high of $171.13.
About International Business Machines
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
Read More - Current Price
- $223.02
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 8 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $208.12 (6.7% Downside)
