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

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IBM (IBM - Free Report) closed the most recent trading day at $140.84, moving +1.31% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.42%. Elsewhere, the Dow gained 1.15%, while the tech-heavy Nasdaq added 2.29%.

Prior to today's trading, shares of the technology and consulting company had lost 6.67% over the past month. This has was narrower than the Computer and Technology sector's loss of 8.09% and lagged the S&P 500's loss of 5.36% in that time.

Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. This is expected to be October 16, 2018. The company is expected to report EPS of $3.40, up 3.03% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $19.10 billion, down 0.27% from the prior-year quarter.

IBM's full-year Zacks Consensus Estimates are calling for earnings of $13.82 per share and revenue of $80.13 billion. These results would represent year-over-year changes of +0.14% and +1.25%, respectively.

Investors might also notice recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. IBM is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, IBM is holding a Forward P/E ratio of 10.06. This represents a no noticeable deviation compared to its industry's average Forward P/E of 10.06.

Also, we should mention that IBM has a PEG ratio of 2.03. 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 2.03 as of yesterday's close.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 84, which puts it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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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