IBM ( IBM) shares have been on a consistent run since last quarter's impressive earnings beat, and many on Wall Street expect another solid performance when the company reports Thursday after the close.

The stock has climbed more than 16% since reporting its third-quarter results, with IBM shares continuing recently to reset 52-week highs, closing over the $100 mark earlier this week.

Shares of the IT services giant closed Wednesday off 80 cents to $100.02.

For the fourth quarter, analysts polled by Thomson First Call peg Big Blue to make a profit of $2.19 a share on sales of $25.66 billion.

"We expect IBM to post strong fourth-quarter results," Toni Sacconaghi, an analyst with Bernstein Research, wrote in a Tuesday note. His estimates are 6 cents above the current consensus on EPS and $320 million higher than the average revenue forecast.

Even with the recent run, the stock remains "attractively valued.... (and) on an apples-to-apples basis (i.e., including stock options and amortization of intangibles), it trades at a 19% discount to Hewlett-Packard ( HPQ), its closest peer," Sacconaghi wrote.

"We note that the stock is essentially flat since 2002, when it last traded over $100, despite EPS growth being up 12% (excluding options and pension costs) over those four years," he added.

Sacconaghi has a buy rating on the stock. Bernstein or its affiliates exercise investment discretion on more than 1% of outstanding common stock of IBM.

Always in the spotlight for IBM observers is IBM's services business, which makes up more than half of total revenue, and has been inconsistent in past quarters.

Thomas Weisel analyst David Grossman noted that large deal volume in the fourth quarter should help calm fears about the secular growth of global services. The company has also seen a "turnaround" in short-term signings.

"We believe (IBM Global Services) fundamentals have bottomed and the strong fourth quarter bookings will engender increased confidence in the 2007 outlook," he wrote. Grossman's firm has a banking relationship with IBM.

Sacchonaghi also sees a strong services quarter, forecasting signings of $17 billion. "This would represent a 50% year-over-year increase in quarterly signings and result in full-year signings growth of 3%."

But others aren't quite as bullish on the company's cash cow.

A.G. Edwards analyst David Wong downgraded the company to hold last week, believing the stock has reached its fair value, while citing "recent lack of growth in bookings in its services business."

Wong wrote that IBM's excellent EPS and revenue growth should continue, but believes its long-term sales-growth potential is low. His firm is long IBM shares.

Bob Djurdjevic, president of Annex Research, which owns shares of IBM, said he regards the services division as "the growth engine of the 1990s (that) has become the laggard of the 21st century. That's an area where I'd like to see if they've made any substantial improvements in the fourth quarter."

However, he says the company's new " service products" offerings (where services are streamlined into prepackaged modules instead of custom-designed for each industry) offers hope for upside in services in the future.

It's IBM's software group that has proven to be golden for the past several quarters. And the company has pursued an aggressive strategy, making 11 acquisitions in software in 2006 to boost the sector even more, including MRO Software, FileNet and Webify.

In the third quarter, software sales rose 9% (7% when adjusted for currency) to $4.4 billion year over year. IBM's middleware brands grew 12% over the comparable period to $3.4 billion, with WebSphere, Tivoli and Information Management all posting double-digit growth.

"Software has been growing substantially, and middleware is growing like gangbusters," says Djurdjevic. "These middleware products -- they've become the de facto standard upon which application software is being written. That's what's driving the revenue and profits up."

Bernstein's Sacconaghi forecasts an 11% growth rate for the software sector this quarter.

Don't overlook hardware, either. "Hardware has been growing in profitability since (IBM) jettisoned its PC business," says Djurdjevic.

In the previous quarter, hardware grew 9%, or 8% when adjusted for currency, to $5.6 billion compared with $5.1 billion in the same period the year before.

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