International Business Machines Corp. IBM shares are down more than 80 percet this week after reporting a slight Q4 EPS beat on a modest Q4 revenue miss. According to a new report by Cantor Fitzgerald analyst Joseph Foresi, the mixed numbers are a good representation of the company’s uncertain future.
“Earnings guidance was set conservatively in our opinion, which we view as a good thing, but ultimately investor focus remains squarely on top-line growth,” Foresi explained.
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He added that, while Strategic Imperative revenue growth of 16 percent was impressive, it fell short of the type of growth the company has registered in recent quarters.
In addition, he notes that margins appear to have been impacted by forex headwinds as well.
Given the company’s new 2016 guidance, Cantor Fitzgerald has lowered its 2016 non-GAAP EPS estimate from $15.04 to $13.51. The firm also lowered its price target from $140 to $122 but maintained its Hold rating.
Disclosure: the author holds no position I the stocks mentioned.
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