UPDATE: Stifel Lowers PT on International Business Machines Following 3Q Revenue Report
In a report published Thursday, Stifel analyst David Grossman reiterated a Buy rating on International Business Machines Corp. (NYSE: IBM), but lowered the price target from $230.00 to $220.00.
In the report, Stifel noted, “IBM reported 3Q revenue of $23.7bn (down 2% cc), substantially below consensus of $24.8bn, and EPS of $3.99, which was above consensus of $3.96. A lower tax rate (17%) contributed $0.30 to 3Q EPS, though IBM has always viewed the tax rate as an operational lever. The core issues were substantial underperformance in the Growth Markets (GMU's down 5% versus +1% in June, China particularly weak and accounted for over ½ of IBM's y/y revenue decline), continued declines in the hardware segment (-16%) and some modest underperformance in the software unit (+2%). Services was largely in line with improving momentum in the GBS unit (+5%, closest comp to ACN) and modest improvement in GTS (-1%). While we were cautious going into the quarter, revenue performance was weaker than we expected and the stock traded down 5-6% last night.”
International Business Machines Corp. closed on Wednesday at $186.73.
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