IBM (IBM) ended the recent trading session at $271.37, demonstrating a +1.87% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.44%. Elsewhere, the Dow saw an upswing of 0.14%, while the tech-heavy Nasdaq appreciated by 0.7%.
Heading into today, shares of the technology and consulting company had gained 10.04% over the past month, outpacing the Computer and Technology sector's gain of 9.59% and the S&P 500's gain of 4.03%.
The investment community will be closely monitoring the performance of IBM in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $2.43, reflecting a 5.65% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $16.08 billion, reflecting a 7.44% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $11.12 per share and revenue of $66.75 billion, which would represent changes of +7.65% and +6.38%, respectively, from the prior year.
Investors should also note any 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 business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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. Over the past month, the Zacks Consensus EPS estimate has remained steady. Right now, IBM possesses a Zacks Rank of #2 (Buy).
Digging into valuation, IBM currently has a Forward P/E ratio of 23.95. This represents a premium compared to its industry average Forward P/E of 22.65.
Meanwhile, IBM's PEG ratio is currently 4.1. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Computer - Integrated Systems industry was having an average PEG ratio of 2.08.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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International Business Machines Corporation (IBM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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