AmTech Reiterates Buy on IBM (IBM) Ahead of Q2 Earnings
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American Technology Research is out with a research note this morning previewing IBM Corp.'s (NYSE: IBM) Q2 earnings, which are expected out after the market close on Thursday, July 17. Ahead of the earnings report, the firm reiterates its Buy rating and $142 price target on IBM. With shares of IBM trading around $122 today, AmTech's price target represents a potential return of about 16% from current levels.
The firm said it expects IBM to report strong earnings driven by continued momentum surrounding its Z10 high-end server and strength in its hardware, software and services segments. As a result, AmTech raised its Q2 sales and EPS estimates from $25.7 billion and $1.81 to $25.9 billion and $1.86, respectively. The Street estimates are $25.86 billion for revs and $1.81 for EPS.
AmTech also boosted its FY08 and FY09 estimates on IBM; FY08 revs moves from $106.4 billion to $106.5 billion and EPS move from $8.50 to $8.55, while FY09 revs are raised from $111 billion to $111.8 billion, but EPS remain flat at $9.50. Analysts are currently looking for sales of $106.95 billion for FY08 and $112.12 billion for FY09, with EPS of $8.54 for FY08 and $9.59 for FY09.
AmTech believes that IBM has been outperforming this year (up 13% year-to-date) "due to its strong position and growth beyond BRIC countries, where over 50 countries are growing IT spending greater than 10%. About 17% of IBM's business is in these 'hyper-growth' emerging markets including South Africa, Malaysia, Poland, Ecuador, Singapore, Peru, Romania, Czech Republic, the Middle East, Vietnam, Australia, etc."
International Business Machines Corporation (IBM) develops and manufactures information technologies, including computer systems, software, networking systems, storage devices, and microelectronics worldwide.
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