Run for IBM (IBM) Growth is Over Says Analyst
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Price: $211.20 -2.7%
Rating Summary:
19 Buy, 21 Hold, 5 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 26 | New: 80
Rating Summary:
19 Buy, 21 Hold, 5 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 26 | New: 80
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Sanford Bernstein analyst Toni Sacconaghi cut his rating on International Business Machines (NYSE: IBM) to Market Perform from Outperform, while raising the price target on the stock slightly from $170 to $173.
The analyst said at his price target, the shares would be at their "highest level versus the technology sector in over 15 years.”
Sacconaghi added that, "In Q4, IBM reported record signings of $22.1B, up 18% YoY and well above consensus estimates of $18B-$19B. While we are encouraged by IBM’s strong signings, IBM did benefit from three very large deals during the quarter, including its first $1B+ signings since Q406. Longer- term, we remain cautious about the secular attractiveness and sustainable growth rate of outsourcing, and note that revenue growth over the last 4 years have been very modest among major domestic players."
In the most recent quarter, IBM's sales were up 7 percent, the most in nine years, but Sacconaghi said that the company will fail to keep this pace going, rising just 3.4 percent in 2011.
Shares of IBM are down 3.38 percent to $153.66 in midday market movement on Wednesday.
The analyst said at his price target, the shares would be at their "highest level versus the technology sector in over 15 years.”
Sacconaghi added that, "In Q4, IBM reported record signings of $22.1B, up 18% YoY and well above consensus estimates of $18B-$19B. While we are encouraged by IBM’s strong signings, IBM did benefit from three very large deals during the quarter, including its first $1B+ signings since Q406. Longer- term, we remain cautious about the secular attractiveness and sustainable growth rate of outsourcing, and note that revenue growth over the last 4 years have been very modest among major domestic players."
In the most recent quarter, IBM's sales were up 7 percent, the most in nine years, but Sacconaghi said that the company will fail to keep this pace going, rising just 3.4 percent in 2011.
Shares of IBM are down 3.38 percent to $153.66 in midday market movement on Wednesday.
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