Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
IBM Common Stock (NYSE:IBM) may face significant challenges in sustaining mid-single-digit revenue growth due to transaction declines, according to UBS.
The Analyst
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
UBS analyst Munjal Shah downgraded IBM from Buy to Neutral while reducing the price target from $170 to $140.
The Thesis
Persisting challenges in Global Technology Services, which accounts for around 35% of IBM’s revenue, are likely to weigh on the company’s performance, Shah said in the note.
He explained that transactional businesses had been impacted by lower volume and an improvement in trends was unlikely given that backlog is down more than $10 billion since 2016 and signings have declined by 9% in the first three quarters of 2019.
FREE REPORT: How To Learn Options Trading Fast
In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.
Pressure in IBM’s legacy businesses may partly offset growth from the first year of its mainframe cycle and the Red Hat acquisition in 2020, the analyst mentioned. He added that 2021 may be “even more challenging” for IBM, with heightened revenue pressure due to tough mainframe comparisons and a lower incremental contribution from Red Hat.
Currency headwinds could add to the company’s woes. Shah further mentioned that IBM is unlikely to repurchase shares, due to its efforts to reduce debt, which would “limit EPS growth outside of deleveraging.”
The analyst reduced the EPS estimate for 2020 and 2021 from $13.80 to $13.50 and from $13.86 to $14.70, respectively, mainly to reflect lower revenue growth.
Price Action
Shares of IBM were down 0.76% at $133.07 at the time of publishing Monday.
Related Links
10 Biggest Price Target Changes For Monday
Barron's Picks And Pans: Boeing, Comcast, Conoco, Emerson And More
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.