|Bid||0.00 x 900|
|Ask||0.00 x 1000|
|Day's Range||187.60 - 187.81|
|52 Week Range||115.31 - 189.40|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||75.05|
|Earnings Date||Sep 17, 2019 - Sep 23, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||189.30|
Value and safety-minded investors like to point to International Business Machines (NYSE:IBM) as an example of a relatively safe company with a rich history. This idea has been tested recently, however, as the share price tumbled from $151 to $136, with a nasty -2.83% drop on the day I'm writing this.Source: Shutterstock So yes, the IBM stock price has been hammered, but is that a good reason to abandon this computing pioneer?I can think of at least three reasons to hold on to your International Business Machines stock shares -- and perhaps even add to your position at what I would consider to be a better-than-fair price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Behold: IBM Finally Gets into the CloudA primary reason for IBM's struggles in recent years is the fact that the company has been a laggard when it comes to getting into cloud-based technology. With the acquisition of cloud superstar Red Hat (NYSE:RHT), however, IBM should now become a serious contender in the open-source software sub-sector of the cloud. * 7 Stocks Under $7 to Invest in Now The upshot, I believe, will be a bottom-line improvement in IBM's revenues, as Red Hat's 85%+ gross margins and 20%+ operating margins make it a proven revenue overachiever; Red Hat's addition of $500 million worth of free cash flow is also a nice bonus. Granted, IBM should have gotten into the cloud in 2010 or 2011, but the Red Hat acquisition is a brilliant move and should help the company play catch-up. Better late than never, you know? Q3 Earnings Will Support the IBM Stock PriceRelated to the first catalyst, the Red Hat acquisition, is the fact that this was not factored into the results for IBM's second-quarter earnings. That means that this game-changing move into the cloud will impact the upcoming third-quarter earnings report. I expect the result to be a swift move to the upside for the IBM stock price.Back on July 17, when IBM reported earnings that outperformed analysts' expectations for Q2 of 2019, the company provided an impressive full-year earnings-per-share guidance of $13.90 -- again, excluding the Red Hat factor.Revenues were fully in line with analysts' projections at $19.16 billion, while the actual EPS of $3.17 easily beat the analysts' forecast of $3.07; nonetheless, the market hasn't reflected any of this in the IBM stock price, which is why I feel that the upcoming Q3 earnings release will be IBM's opportunity to turn investor sentiment around and, hence, catch a bid for the share price. Trade-War Woes Won't Last ForeverThe ongoing conflict between the United States and China feels like it will drag on until the end of time; few among us ever imagined that it would have lasted this long without a resolution in sight. The tech sector has been hit harder than most, and the IBM stock price has suffered collateral damage in this heated, protracted tariff war.Having been in the investing game for longer than some of my readers have been alive, I can assure you right now that the tariff dispute will end and the stock market will experience, at the very least, a short-term relief rally bordering on outright euphoria.No one is blaming International Business Machines for the political and/or economic tug-of-war between to global superpowers, and IBM shares have the potential to make an outsized, north-bound move when a trade pact is finally reached -- probably sooner than later, as an election cycle will be upon us in 2020. The Takeaway on IBM StockBetween the Red Hat acquisition, the potential for a positive Q3 earnings surprise, and the imminent resolution to the tariff war, I'm envisioning a powerful move for IBM stock. International Business Machines stock is down but not out, as multiple factors all point to a company that's looking to the future even if short-sighted investors are still obsessing over IBM's past.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Large-Cap Stocks to Sell Right Now * 7 Stocks Under $7 to Invest in Now * 7 Marijuana Stocks With Critical Levels to Watch The post 3 Undeniable Reasons to Buy IBM Stock Now appeared first on InvestorPlace.
Red Hat Enterprise Linux 7.7 adds enhanced features for hybrid cloud deployments and containerized application development while retaining a focus on production stability
As a component of the Dow Jones Industrial Average, International Business Machines (NYSE:IBM) stock gets a lot of attention due to its high dividend yield, which is currently 4.6%.Source: Shutterstock On July 17, IBM reported its second-quarter earnings. Its earnings per share beat analysts' average outlook, but its top line came in below their average estimate. Overall, Wall Street's reaction to Big Blue's quarterly results has been muted. * 10 Cyclical Stocks to Buy (or Sell) Now In 2019, IBM stock is up about 24%, and now may be time for investors to take some of the impressive paper profits they've made in IBM stock. In the next several weeks, I expect IBM stock price to be volatile and to decline. Here are the most important things that investors should know about International Business Machines stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips How IBM Makes MoneyIn recent years IBM has become a diversified company with a wide range of worldwide offerings, including IT hardware, software, and services. Five businesses generate revenue for IBM. * Cloud & Cognitive Software, which includes cloud and data platforms, cognitive applications and transaction-processing platforms. * Global Business Services, or GBS, which includes consulting, application management and global process services. * Global Technology Services, or GTS, which includes infrastructure and cloud services and technology support services. * Systems, which includes systems hardware and operating systems software. * Global Financing, which includes financing and used equipment sales.Currently, IBM's largest business segment is GTS. Going forward, management is aiming for Cloud & Cognitive Software to become a leading driver of the company's revenue.When investors look back at the earlier part of this decade, they may realize that IBM was not fully on top of developments in the tech space. Namely, IBM did not take enough steps to participate in the cloud, an industry that is projected to grow exponentially in the next few years.Instead, management continued to concentrate on Enterprise IT, whose growth was and likely will be limited. IBM has also blamed external developments for the failure of its turnaround.IBM stock price has reflected the subpar decisions of its management. From Apr. 2014 to Dec. 2015, IBM stock price fell from $200 to $120. In Feb 2017, IBM went back up to $180, only to hit $105.94 in Dec. 2018. IBM 's Q2 Results Were MixedIBM's top line continued to fall in Q2, declining to $19.16 billion from the $20 billion it took in during the same period a year earlier. The average top-line estimate was $19.17 billion.The company's earnings per share came in at $2.81, a year-over-year increase of 8%.Excluding certain items, its EPS was $3.17, compared to the average outlook of $3.08.IBM CEO Ginni Rometty highlighted the growth of the company's Cloud & Cognitive Software segment, whose revenue increased 3.2% to $5.6 billion.However, the revenue of Microsoft's (NASDAQ:MSFT) Intelligent Cloud unit jumped 19% year-over-year, indicating that IBM is not yet able to compete with other dominant companies in this lucrative area.Q2 was IBM's fourth straight quarter without revenue growth. Moreover, the top lines of its systems and global financing businesses fell significantly. Will IBM's Most Expensive Acquisition Pay Off?IBM's management has been looking to revitalize the company by making it a dominant force in open source and the cloud.In accordance with that goal, in Oct. 2018 IBM announced that it would acquire Red Hat (NYSE:RHT), a well-respected, open-source, enterprise-software maker for $34 billion.Well- known for its corporate version of Linux, Red Hat generates a great deal of revenue from the cloud. But will Red Hat improve IBM's fundamentals?Red Hat has significant competitive advantages. And in several quarters, it may indeed become a catalyst that will contribute to the growth of IBM's cloud business.However, a prolonged trade war between the U.S. and China could adversely affect IBM stock price. Wall Street has also voiced concern that the global economy could be headed for a downturn.Therefore, the rest of 2019 could prove somewhat bumpy for IBM stock. Don't forget that IBM paid a hefty premium for Red Hat, and that the deal was one of the largest tech acquisitions of all time. On Aug. 2, IBM lowered its 2019 earnings guidance, citing an adjustment to its deferred revenue as a result of the Red Hat deal.Additionally, IBM now plans to suspend its share buybacks in 2020 and 2021 while it works on decreasing the debt it accumulated from the purchase of Red Hat. The Short-Term Technical Outlook of IBM StockIf you are an investor who pays attention to short-term technical charts, you may be interested to know that the charts of International Business Machines stock are painting an overbought picture and telling investors to be cautious.In early June, IBM's shares were trading around $127. Then came the stock market rally in which IBM participated. On Aug. 2, IBM shares reached a 2019-high of $152.95. And IBM stock price is now hovering around $141.In other words, the shorter-term IBM stock chart points to volatility and some potential declines, possibly quite soon.Considering how much IBM stock is up so far in 2019 and the current question marks in the broader markets, long-term owners of IBM stock should probably not hesitate to take some money off the table.The most likely scenario is that IBM stock will spend some time between $125 and $145.Until the company's next earnings report in October, I'd expect the $125 level to act as major support.On the other hand, $147.5 and then $152.5 are likely to act as near-term resistance. The Bottom Line on IBM StockIBM stock price is likely to become increasingly volatile in the near-term.As a result, if you are one of the investors who bought IBM stock in early 2019, you may want to consider taking some of your profits.However, if you do not want to sell your IBM stock due to its dividends, then you may want to stay the course and ride out any short-term volatility.Alternatively, you may consider hedging your position. As for hedging strategies, covered calls or put spreads that expire on Sept. 20 could be appropriate, as straight put purchases are likely to be expensive due to the stock's heightened volatility.Finally, if you aren't already long IBM shares, you may want to remain on the sidelines until you see a better opportunity to buy the shares on weakness. That strategy would also enable investors to benefit from higher dividend yields.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cyclical Stocks to Buy (or Sell) Now * 7 Biotech ETFs That Should Remain Healthy * 7 of the Hottest AI Stocks to Buy Now The post Should Investors Sell IBM Stock? appeared first on InvestorPlace.
For many on Wall Street, IBM (NYSE:IBM) is a large-cap tech has-been. But following last week's earnings beat that view is looking shortsighted both off and on the IBM stock chart. Let me explain.Source: Shutterstock This past Thursday was a very good day for IBM shareholders. Shares finished the session up 4.55%. More important, Thursday offered strong support for investors looking at the established technology giant with fresh interest on the heels of the company's Q2 earnings report.By the numbers IBM delivered non-GAAP earnings of $3.17 per share which topped Street views of $3.06. Sales of $19.16 billion for the period matched consensus estimates while falling 4% year-over-year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn of itself, the mixed results aren't going to win over investors. But a closer inspection of IBM's revenues and it's just completed acquisition of Red Hat (NYSE:RHT) point to an emerging growth story as an important pivot from computer hardware sales into software and the cloud market which should prove a boon for IBM's shareholders. * 7 Defense Stocks to Buy to Fortify Your Portfolio What's more, if we switch from Big Blue's business prospects over to the price chart, the view for IBM stock's longer-term prospects looks very promising as well. IBM Stock Weekly Chart Click to EnlargeAs discussed late last month, the past few years have seen IBM stock's fortunes languish after establishing an all-time-high in 2013. Since then shares have witnessed two major periods of corrective price action. The good news is that, taken together, the price action has formed a very large and constructive-looking double bottom base.Now and with IBM's post-earnings reaction breaking above angular resistance and the 62% retracement level into the right side of pattern base, shares are in strong position to continue rallying and eventually break out to new highs.The other reality is I don't anticipate IBM stock will completely transform itself. Price momentum similar to Amazon (NASDAQ:AMZN) isn't a reasonable expectation. But could a rally similar to the run Microsoft (NASDAQ:MSFT) has enjoyed the past couple years emerge? Possibly. But first things first. The IBM Stock TradeWith shares roughly 4% to 5% above April's pivot high and angular resistance, IBM stock is in a buyable, non-extended position. But I wouldn't buy shares just yet. With stochastics overbought on the monthly, as well as weekly and daily time frames, waiting to go long IBM on a very likely pullback towards support is the favored strategy.For now, I'd put IBM on the buy watch list and monitor shares for profit-taking towards or ideally into the area in between $140 and $144.Should IBM's price action cooperate, using the weekly time frame to confirm a fresh higher low candlestick within the right side of base is how I'd buy shares. For risk management, using the newly-formed pivot low as a stop-loss or a blended technical and dollar-based exit below $137 to keep exposure off and on the price chart acceptable-looking makes sense.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions IBM stock or its derivatives or any other securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post Earnings Show It's Time to Buy IBM Stock on a Pullback appeared first on InvestorPlace.
Palo Alto-based cloud data provider Cloudera Inc. plans to open-source all of its software and focus on providing value-added services on top of its platform, the company said Wednesday.
International Business Machines Corp. (IBM) is showing some conflicting signals right now, as the company expects an earnings hit in its July 17 report, within an otherwise solid outlook. Paradoxically, the hit will likely come from IBM’s biggest piece of good news: the recent close of its Red Hat, Inc. (RHT) acquisition.First, some background. Last year, IBM bid $34 billion to acquire Red Hat, the open source cloud company. The deal has been completed as of this week, with IBM paying $190 per share for Red Hat’s existing stock. The deal was closed in cash, and IBM issued a bond series to cover $20 billion of the purchase price. The added debt pushes Big Blue’s total borrowed liabilities over $60 billion, and the company will be suspending share buybacks for the next two years.On the plus side, bringing Red Hat on board offers real advantages to IBM. It makes Big Blue the world’s largest hybrid cloud provider, adding services to a business that already brings in $19 billion annually for IBM. Red Hat will function as a distinct division within the larger company, staying focused on its current core business of open source software. IBM’s CEO, Ginni Rometty, says that with this acquisition, “IBM will offer companies the only open cloud solution that will unlock the full value of the cloud for their business.”Putting on a New HatAs for Red Hat (RHT), company CEO Jim Whitehurst said of the deal, “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”Specifically, the Red Hat brings to IBM the ability to tap into the large customer base of companies that are not yet all-in on cloud computing. According to IBM’s research, some 80% of the potential market is reluctant to fully enter cloud computing, mainly due to the proprietary nature of the systems. Red Hat’s open source software offers a viable alternative.More importantly, as far as IBM is concerned, Red Hat generates nearly $1 billion in free cash flow annually. This is of major importance, as is Red Hat’s $3.4 billion in fiscal 2019 revenues, considering the debt load that IBM took on to complete the acquisition.Short Term Pain, Long Term GainIt’s a bright vision of the future, and it may well come true. Accounting rules, however, will require in the short term that IBM report the acquisition costs against the bottom line.According to Evercore analyst Amit Daryanani, the negative impact could be as much as 80 cents per share for 2019 and 1 dollar per share in 2020. This puts Daryanani’s EPS estimate for FY2019 at $13.10 to $13.90, with the upper end in line with company guidance.Daryanani explains, “Although Red Hat's revenue profile is fairly substantial, with strong levels of profitability, we note that purchase accounting treatment of the target company's deferred revenue will make IBM unable recognize a meaningful portion of Red Hat's deferred revenue as it converts to actual revenue; this is while IBM will have to incur 100% of Red Hat's operating expense.”Despite predicting an earnings hit on the way, Daryanani still sees IBM as a long-term gain for investors. He gives the stock an outperform rating and a price target of $150, basing his positive outlook on the combination of IBM’s 23% ytd gains and Red Hat’s solidly profitable bottom line. His price target suggests an upside of 6.7% for IBM shares. IBM reports earnings on July 17, and we’ll see then how this forecast matches up with reality.Stifel’s David Grossman believes it will. He sees IBM in a more traditional light, describing the stock as “a defensive holding with two potential catalysts, namely continued improvement in its core infrastructure services business and demonstrated success in leveraging Red Hat.” His price target, $169, clearly shows his confidence in IBM’s prospects – it implies an impressive 20% upside for the stock.Overall, IBM holds a moderate buy rating from the analyst consensus. The average price target of $157 gives an upside of 12% when compared to the $140 current trading price.View IBM Price Target & Analyst Ratings Detail
Slews of Form 4s – the regulatory paperwork required for insider stock transactions – dropped late Tuesday, as top brass Red Hatters finally got their first big dollar payouts from the $34 billion IBM deal.
Moody's Investors Service ("Moody's") has downgraded IBM Credit LLC (IBM Credit) senior unsecured and long term issuer ratings to A2 from A1 (Rating Under Review) and affirmed its Prime-1 commercial paper and short term issuer ratings. The rating action results from the downgrade of IBM Credit's parent International Business Machines Corporation (IBM, A2) and concludes the review Moody's initiated October 29, 2018. As part of the same rating action, Moody's has withdrawn the outlooks on IBM Credit's Long-Term Issuer rating and Senior Unsecured rating for its own business reasons.
IBM (NYSE: IBM ) closed on its acquisition of Red Hat Inc (NYSE: RHT ) Tuesday. While the deal marks IBM’s acquisition of “critical mass” in the hybrid cloud market, the deal poses potential execution ...
NEW YORK , July 9, 2019 /PRNewswire/ -- T-Mobile US Inc (NASD: TMUS) will replace Red Hat Inc. (NYSE: RHT) in the S&P 500 effective prior to the open of trading on Monday, July 15 . S&P 500 & 100 constituent ...
(IBM) today completed its acquisition of the open-source software giant (RHT) for $190 a share in cash. IBM (ticker: IBM) said Red Hat will continue to be run by CEO Jim Whitehurst, who will now report to IBM CEO Ginni Rometty. Red Hat will keep its headquarters in Raleigh, N.C., maintain the Red Hat brand, and operate as a unit inside IBM’s Cloud and Cognitive Software segment.
Moody's Investors Service ("Moody's") downgraded International Business Machines Corporation's ("IBM") senior unsecured rating to A2 from A1 following receipt of regulatory approval for IBM to acquire Red Hat, Inc. ("Red Hat", unrated) for approximately $34 billion in an all cash transaction. IBM's Prime-1 commercial paper rating has been affirmed.
Could the IBM buy of Red Hat mean growth in Raleigh? That’s the implication from comments made by Arvind Krishna, senior vice president of cloud and cognitive software at IBM.
“In fact, our commitment to that vision has grown – Red Hat will remain a distinct unit in IBM as we work to help customers deliver any app, anywhere realizing the true value of the hybrid cloud,” writes Red Hat CEO Jim Whitehurst.
Underscoring the drive into high-margin businesses, IBM in October agreed to buy Red Hat, the company’s biggest acquisition in its more than 100-year history. Ginni Rometty, IBM chief executive since 2012, has steered the company toward faster-growing segments such as cloud, software and services and away from traditional hardware products, but not without a bumpy journey. Rometty cited as examples major IBM cloud customers like Morgan Stanley and Delta Air Lines .
ARMONK, New York and RALEIGH, North Carolina, July 9, 2019 /PRNewswire/ -- IBM (NYSE: IBM) and Red Hat announced today that they have closed the transaction under which IBM acquired all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total equity value of approximately $34 billion. The acquisition redefines the cloud market for business. Red Hat's open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM's innovation and industry expertise, and sales leadership in more than 175 countries.
IBM closed its $34 billion acquisition of Red Hat, its largest deal ever. Yahoo Finance's Ines Ferre joins Seana Smith on 'The Ticker' to discuss the acquisition and a new report that claims IBM has patented a smartwatch that unfolds into a tablet.
Jul.09 -- IBM closes a $34 billion deal to buy Red Hat. IBM CEO Ginni Rometty and Red Hat CEO James Whitehurst talk to Bloomberg's David Westin about the merger.