Wednesday, 19 April 2017

IBM - post earnings washout

Whilst the main market saw yet another day of moderate swings, there was very significant downside in International Business Machines (IBM), which settled -4.9% at $161.69. Core support is around the $160 threshold, and now its just a case of whether the stock settles the month above or below.

IBM, daily

IBM, monthly



Without going over the earnings in depth - as is covered across thousands of other sites, Q4 EPS was a respectable $2.38... on rev' of $18.16bn.

The more interesting aspect is that full year guidance is for EPS of $13.80.

Consider that with a price of $160, that is a PE in the 11s. On any fair basis... IBM is cheap. Sure, the growth potential is limited, but keep in mind, the annual dividend is $5.60 - a yield of around 3.3%.

Regardless of any price chop into end month, IBM, along with the rest of the market, should broadly climb this year. Equity bulls should only be concerned if IBM trades below the Oct'2016 low of $145.

The grand bullish target is the March 2013 high of $192.17. On balance.. that should be seen, whether late this year... or early 2018.

Bullish... quality tech.