How Analysts See IBM After Earnings

By Chris Lange Updated Jan 13, 5:22AM EST · Published Jul 24, 10:11AM EDT

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How Analysts See IBM After Earnings — © Thinkstock

International Business Machines Corp. (NYSE: IBM) posted mixed results when it reported earnings after the close on Monday. Keep in mind that revenues for Big Blue have been slumping for the past 14 quarters or so, but there was some good news in this report. A few analysts keyed in on Big Blue after earnings, but the sentiment was somewhat mixed.

24/7 Wall St. has included some of the key highlights from the earnings report, as well as what analysts are saying after the fact.

The company posted earnings of $2.95 per share (EPS) on revenues of $20.2 billion. The Thomson Reuters consensus estimates were EPS of $2.89 and $20.03 billion in revenue. Its results in the same quarter a year ago were $3.84 EPS and $20.81 billion in revenue.

In the second quarter, revenue from the Strategic Imperatives segment increased 12% to $8.3 billion, and cloud revenue was $11.6 billion over the past 12 months. Another boost was that IBM’s cloud as-a-service annual run rate totaled $6.7 billion in the quarter, representing a gain of 50% looking back to this period last year. IBM further said that its Strategic Imperatives revenue reached $30.7 billion over the trailing 12 months and now represents right at 38% of IBM’s companywide revenues.

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The company generated net cash from operating activities of $3.4 billion, and that figure would have been $3.1 billion if excluding the company’s global financing receivables. IBM’s free cash flow was $2.1 billion in the second quarter.

Over the course of the week, analysts piled into Big Blue:

Cowen reiterated an Outperform rating.
RBC Capital Markets reiterated a Sector Perform rating and raised its price target to $165 from $155.
Societe Generale has a Sell rating with a $130 price target.
Jefferies has an Underperform rating with a $125 price target.
Deutsche Bank has a Hold rating with a $145 price target.
BMO Capital Markets has a Market Perform rating with a $165 price target.
Sanford Bernstein has a Market Perform rating with a $140 price target.
JMP Securities has a Market Outperform rating with a $172 price target.
Morgan Stanley has an Overweight rating with a $182 price target.
Goldman Sachs reiterated a Neutral rating with a $147 price target.
Credit Suisse reiterated an Underperform rating with a $110 price target.
Citigroup has a Neutral rating with a $160 price target.
JPMorgan reiterated a Hold rating.

Shares of Big Blue closed trading at $162.07 on Friday, with a consensus analyst price target of $153.90 and a 52-week trading range of $116.90 to $162.14.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.