On the CC Mark Loughridge announced that IBM enjoyed a 13% YOY EPS growth rate in 2012! He then proceeded to guide to $16.70 for the year 2013, and that is only a 9% growth rate. Will business slow down that much or is he sandbagging? I suggest the ladder, as they want to continue to play the Wall Street game of beat and raise. IBM will grow EPS at the same double digit rate it has for the past few years, and I expect about $17 per share in 2013! With its current multiple IBM is a $238 stock. I expect it to trade between $195 and $225 in $2013!
IBM can pretty much control the EPS growth with their massive share buyback plan. I know many long term investors would rather see the money plowed into dividends. But, as long as IBM has their "roadmap to $20" the firm will be buying back shares heavily while gradually increasing the dividend.
"IBM can pretty much control the EPS growth with their massive share buyback plan" Well said. Now what is IBM doing about revenue? THAT is the m ost important stat that demonstrates the company's income. EPS is simple to doctor. Just have IBM buy more shares. Simple.