Yahoo Finance Why Have Most Analysts Given IBM a ‘Hold’ Recommendation?
Can Strategic Imperatives Turn IBM Around in Fiscal 1Q16?
Wall Street analysts’ view on IBM
Earlier in this series, we looked at some aspects of IBM’s (IBM) value proposition in the software industry in the United States. We explored the company’s forward dividend yield compared to those of its peers, including Microsoft (MSFT), Oracle (ORCL), and SAP (SAP), as of April 8, 2016. We also looked at the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples of these players.
Now, let’s take a look at select market-centric views and metrics for IBM. Let’s start with Wall Street analysts’ views on the company. As we can see in the graph below, of the 27 analyst recommendations on IBM stock, 56% were “hold” as of April 8, 2016. About 26% were “buy” recommendations, and 19% were “sell.”
IBM’s price performance
IBM’s stock price movement during the past month has been positive. As of April 8, 2016, the company’s stock has risen 7.0%.
Analysts’ target prices
The Wall Street consensus target price for IBM is $137 per share. The median target price was $135.00 as of April 8, 2016. IBM’s closing price was $149.31 on the same date. Morgan Stanley’s Katy L. Huberty believes IBM stock could reach $195.
For diversified exposure to select software companies in the United States, you may want to consider investing in the SPDR S&P 500 ETF (SPY). SPY has an exposure of 8% in the application software industry.
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