This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

IBM's Growth Fueled by Cloud Computing

BOSTON ( TheStreet Ratings) -- IBM (IBM - Get Report) is scheduled to report second-quarter earnings after the stock market closes today, with analysts forecasting year-over-year improvements in earnings and revenue.

Analysts are expecting the global technology firm to report earnings per share of $3.03, compared with $2.61 a year earlier. Revenue is estimated to increase 7% to $25.4 billion from $23.7 billion due to improved demand within its systems technology segment. Growth in IBM's cloud offerings are also providing a source of growth, as management has noted that cloud related revenue is expected to double in 2011.

The following is taken from a first-quarter report published by TheStreet Ratings, an independent-research unit of TheStreet that uses a quantitative model to evaluate stocks.

IBM improved earnings per share by 17.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, IBM increased its bottom line by earning $11.58 versus $10.01 in the prior year. This year, the market expects an improvement in earnings ($13.20 versus $11.58).

We rate IBM a "buy." This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. Our model maintains a price target of $228 on shares of IBM, indicating the potential for 30% upside from current levels.

The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the IT Services industry and the overall market, IBM's return on equity significantly exceeds that of both the industry average and the S&P 500.

>>For upcoming earnings and estimates, see our Earnings Calendar.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
IBM $164.00 -0.44%
FB $86.62 -1.10%
GOOG $521.22 -0.31%
TSLA $265.29 -5.20%
YHOO $38.08 -1.40%

Markets

DOW 17,668.85 -14.73 -0.08%
S&P 500 2,066.80 -1.96 -0.09%
NASDAQ 4,963.3980 -28.5420 -0.57%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs