International Business Machines $IBM Stock Up On EPS and Revenue Beats

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IBM stock rose in after-hours trading on January 24, 2022, after the company reported EPS and revenue beats.

IBM RELEASES FOURTH QUARTER RESULTS

On January 24, 2022, IBM (NYSE: IBM) announced its fourth-quarter 2021 earnings results. IBM reported Q4 adjusted EPS of $3.35 versus the consensus estimate of $3.14. The company reported Q4 revenue of $16.7B versus the consensus estimate of $15.98B.

“We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting,” said Arvind Krishna, IBM chairman and chief executive officer. “Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single-digit revenue growth and strong free cash flow in 2022.”

“In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem and acquiring 15 companies to strengthen our hybrid cloud and AI capabilities,” said James Kavanaugh, IBM senior vice president and chief financial officer. “With the separation of Kyndryl we now have taken the next step in the evolution of our strategy, creating value through focus and strengthening our financial profile.”

IBM to divest healthcare data, analytics assets to Francisco Partners

On January 21, 2022, IBM announced that the companies have signed a definitive agreement under which Francisco Partners will acquire healthcare data and analytics assets from IBM that are currently part of the Watson Health business. The assets acquired by Francisco Partners include data sets and products, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software offerings. The transaction is expected to close in the second quarter of this year and is subject to customary regulatory clearances. Financial terms of the transaction were not disclosed.

IBM Chief Marketing Officer has left company, Forbes reports

On January 18, 2022, an IBM spokesperson has confirmed to Forbes’ Marty Swant that Chief Marketing Officer Carla Pineyro Sublett has left the company and that IBM’s marketing division will report to Jonathan Adashek, who has been named chief communications officer and SVP of marketing and communications, but declined to comment further on the changes. Source: https://www.forbes.com/sites/michellegreenwald/2022/01/18/ibm-chief-marketing-officer-carla-pieyro-sublett-departs/?sh=10b6d6631c9a

IBM acquires Envizi for undisclosed amount

On January 11, 2022, IBM announced it has acquired Envizi, a leading data and analytics software provider for environmental performance management. This acquisition builds on IBM’s growing investments in AI-powered software, including IBM Maximo asset management solutions, IBM Sterling supply chain solutions and IBM Environmental Intelligence Suite, to help organizations create more resilient and sustainable operations and supply chains. This acquisition closed on January 11. Financial details were not disclosed. IBM is already using Envizi to help streamline tracking and reporting of its progress against the company’s own goals in renewable electricity procurement and greenhouse gas (GHG) emissions reduction.

“To drive real progress toward sustainability, companies need the ability to transform data into predictive insights that help them make more intelligent, actionable decisions every day,” said Kareem Yusuf, PhD, General Manager, IBM AI Applications. “Envizi’s software provides companies with a single source of truth for analyzing and understanding emissions data across the full landscape of their business operations and dramatically accelerates IBM’s growing arsenal of AI technologies for helping businesses create more sustainable operations and supply chains.”

IBM downgraded to Sell from Neutral at UBS

On January 11, 2022, UBS analyst David Vogt downgraded IBM to Sell from Neutral with a price target of $124, down from $136. Near-term risk to Q4 operating estimates and an “elevated valuation” leaves the shares “vulnerable” over the next 12 months, Vogt tells investors in a research note. The analyst says IBM is trading at over three turns above its trailing three and five-year averages, indicating the market is underwriting management’s mid-single-digit target “despite a history of execution issues.” Further, he believes the shares are s also pricing in 2022 and 2023 earnings estimates that are 10% higher than his estimates.

📺 This is an impressive set of revenue numbers for IBM, says Evercore ISI’s Amit Daryanani

This is an impressive set of revenue numbers for IBM, says Evercore ISI's Amit Daryanani

📉 IBM Stock Technical Analysis

IBM stock chart as of January 24, 2022.

The long-term trend is neutral, but the short-term trend is negative. Better not to enter a long position right now. IBM is part of the IT Services industry. There are 150 other stocks in this industry. IBM outperforms 77% of them. IBM is currently trading in the middle of its 52-week range. This is in line with the S&P500 Index, which is also trading in the middle of its range.

There is a support zone ranging from 117.90 to 118.61. This zone is formed by a combination of multiple trend lines in the weekly time frame. There is also a support zone ranging from 115.81 to 115.81. This zone is formed by a combination of multiple trend lines in multiple time frames.

There is a resistance zone ranging from 132.38 to 133.58. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames. There is also a resistance zone ranging from 137.12 to 139.05. This zone is formed by a combination of multiple trend lines in multiple time frames.

The technical rating of IBM is bad and it also does not present a quality setup at the moment. IBM stock has a Setup Rating of 3 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when IBM stock consolidates and has a Setup Rating of 8 or higher.

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