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IBM (IBM) Gains As Market Dips: What You Should Know

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IBM (IBM - Free Report) closed the most recent trading day at $144.11, moving +0.55% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.3%.

Heading into today, shares of the technology and consulting company had gained 2.68% over the past month, outpacing the Computer and Technology sector's loss of 5.47% and the S&P 500's loss of 3.58% in that time.

Investors will be hoping for strength from IBM as it approaches its next earnings release. In that report, analysts expect IBM to post earnings of $2.49 per share. This would mark a year-over-year decline of 3.49%. Our most recent consensus estimate is calling for quarterly revenue of $17.74 billion, up 1.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.81 per share and revenue of $74.93 billion, which would represent changes of +24.68% and +1.77%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for IBM. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.08% lower. IBM is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 13.26 right now. This valuation marks a discount compared to its industry's average Forward P/E of 22.57.

It is also worth noting that IBM currently has a PEG ratio of 1.63. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.57 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 28% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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