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IBM (IBM) Gains But Lags Market: What You Should Know

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IBM (IBM - Free Report) closed at $167.38 in the latest trading session, marking a +0.95% move from the prior day. This change lagged the S&P 500's 1.19% gain on the day. Meanwhile, the Dow experienced a rise of 0.25%, and the technology-dominated Nasdaq saw an increase of 1.96%.

Prior to today's trading, shares of the technology and consulting company had lost 1.53% over the past month. This has lagged the Computer and Technology sector's gain of 5.37% and the S&P 500's gain of 3.35% in that time.

The investment community will be closely monitoring the performance of IBM in its forthcoming earnings report. The company is scheduled to release its earnings on July 24, 2024. It is anticipated that the company will report an EPS of $2.17, marking a 0.46% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $15.58 billion, reflecting a 0.67% rise from the equivalent quarter last year.

IBM's full-year Zacks Consensus Estimates are calling for earnings of $9.91 per share and revenue of $63.04 billion. These results would represent year-over-year changes of +3.01% and +1.91%, respectively.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.11% downward. IBM currently has a Zacks Rank of #3 (Hold).

In the context of valuation, IBM is at present trading with a Forward P/E ratio of 16.73. This signifies no noticeable deviation in comparison to the average Forward P/E of 16.73 for its industry.

It's also important to note that IBM currently trades at a PEG ratio of 4.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IBM's industry had an average PEG ratio of 2.43 as of yesterday's close.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 76, positioning it in the top 31% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.


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