International Business Machines Corporation (NYSE: IBM) stock jumped 0.30% on Friday to $125.31 against a previous-day closing price of $124.93. With 4.04 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.69 million shares. During the session, the Information Technology Services company that operates in wider Technology sector, reached to the highest price of $126.51 whereas the lowest price it dropped to was $124.41. The 52-week range on IBM shows that it touched its highest point at $144.73 and its lowest point at $114.56 during that stretch. It currently has a 1-year price target of $143.03. With its current market cap of 111.59 billion, IBM has annualized dividend of $6.60 while the current yield stands at 5.27%. Beta for the stock currently stands at 0.84.
Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of IBM was down-trending over the past week, with a drop of -0.14%, but this was down by -7.00% over a month. Three-month performance dropped to -9.48% while six-month performance fell -2.33%. The stock lost -2.55% in the past year, while it has lost -6.25% so far this year. A look at the trailing 12-month EPS for IBM yields 6.31 with Next year EPS estimates of 10.05. For the next quarter, that number is 1.79. This implies an EPS growth rate of 13.40% for this year and 7.55% for next year. EPS is expected to grow by 9.66% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -16.20%.
Float and Shares Shorts:
At present, 903.18 million IBM shares are outstanding with a float of 902.32 million shares on hand for trading. On Jul 14, 2022, short shares totaled 22.41 million, which was 2.48% higher than short shares on Jun 14, 2022. In addition to Mr. Arvind Krishna as the firm’s CEO & Chairman, Mr. James J. Kavanaugh serves as its CFO and Sr. VP of Fin. & Operations.
Through their ownership of 56.94% of IBM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 30.00% of IBM, in contrast to 27.55% held by mutual funds. Shares owned by individuals account for 0.39%. As the largest shareholder in IBM with 8.16% of the stake, The Vanguard Group, Inc. holds 73,703,012 shares worth 73,703,012. A second-largest stockholder of IBM, SSgA Funds Management, Inc., holds 52,976,674 shares, controlling over 5.87% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in IBM, holding 48,421,473 shares or 5.36% stake. With a 2.95% stake in IBM, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 26,625,451 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.22% of IBM stock, is the second-largest Mutual Fund holder. It holds 20,072,893 shares valued at 2.58 billion. Schwab US Dividend Equity ETF holds 1.25% of the stake in IBM, owning 11,314,150 shares worth 1.45 billion.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for IBM since 18 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With IBM analysts setting a high price target of $163.00 and a low target of $115.00, the average target price over the next 12 months is $141.90. Based on these targets, IBM could surge 30.08% to reach the target high and fall by -8.23% to reach the target low. Reaching the average price target will result in a growth of 13.24% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. IBM will report FY 2022 earnings on 01/19/2023. Analysts have provided yearly estimates in a range of $9.66 being high and $8.82 being low. For IBM, this leads to a yearly average estimate of $9.31. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. International Business Machines Corporation surprised analysts by $0.05 when it reported $2.31 EPS against a consensus estimate of $2.26. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $2.04 and the low estimate is $1.72. The average estimate for the next quarter is thus $1.80.
Summary of Insider Activity:
Insiders traded IBM stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 1,914 shares were bought while 978 shares were sold. The number of buy transactions has increased to 39 while that of sell transactions has risen to 39 over the past year. The total number of shares bought during that period was 310,715 while 153,712 shares were sold.