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IBM (IBM) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, IBM (IBM) closed at $126.92, marking a -1.77% move from the previous day. This change lagged the S&P 500's 0.23% gain on the day. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.43%.

Coming into today, shares of the technology and consulting company had gained 2.6% in the past month. In that same time, the Computer and Technology sector gained 4.19%, while the S&P 500 gained 3.86%.

Investors will be hoping for strength from IBM as it approaches its next earnings release. In that report, analysts expect IBM to post earnings of $1.77 per share. This would mark a year-over-year decline of 62.42%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.48 billion, down 5.95% from the year-ago period.

Investors might also notice recent changes to analyst estimates for IBM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.46% lower. IBM currently has a Zacks Rank of #4 (Sell).

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 11.23. Its industry sports an average Forward P/E of 40.56, so we one might conclude that IBM is trading at a discount comparatively.

Investors should also note that IBM has a PEG ratio of 3.42 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBM's industry had an average PEG ratio of 2.7 as of yesterday's close.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 209, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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