Analysts predict an increase in IBM sales
Not so long ago, the U.S. corporation IBM held a restructuring, the results of which can already be estimated by the approaching quarterly results. Analysts also voiced a positive outlook, according to which the corporation’s sales volume can be expected at 15 billion dollars. Earnings per share are expected to be $2.26.
The last quarter was quite successful for IBM. Revenue then was more than 14 billion dollars, which exceeded analysts’ expectations, who talked about 13.8 billion dollars.
The new strategy adopted by the U.S. technology giant allowed it to focus on the development and sale of software. In addition, IBM is investing in artificial intelligence and developing hybrid cloud computing services. The corporation also launched a new production phase for its hardware division, which specializes in mainframes. IBM executives expect this area to boost sales over the next few years. The software sector showed a 12.3% increase last quarter. Revenue growth of 13.3% was observed in the consulting business. In the current quarter, the IBM management plans to reach the upper limit of the forecasted volume of revenues. At the same time, it believes that the global slowdown should not significantly affect the company’s processes.
According to the IBM CEO, he estimates an increase in spending in the global IT sector of 4-5%, which exceeds the projected increase in GDP. Such dynamics allow companies to continue developing even during the global economic downturn. IBM experts expect that the free cash flow this year will be $10-10.5 billion and by 2024 its volume can be expected to reach $35 billion.
The experts of Morgan Stanley earlier also talked about IBM’s prospects, they advised buying shares of the corporation. Their main argument was that the revenue of the American manufacturer in this quarter would grow by 6% compared with last year. IBM demonstrates stable development primarily due to software development and consulting services.
Analysts at BofA Global Research, which recently raised the forecast for the value of IBM shares, agree with their Morgan Stanley colleagues. The experts note that the U.S. company offers a dividend yield of nearly 5%. This figure is considered one of the highest among representatives of the technology sector. Over the current year, shares of IBM demonstrated an increase of 4.7%, which is ahead of the growth results of companies included in the S&P 500 Index. At the same time, the corporation is not going to stop and plans to increase productivity in the near future.
