Big Blue (IBM) to Beat Again? Earnings Coming..

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 0

The following article is provided exclusively to readers of SelfInvestors by the The Correct Call.


International Business Machines (IBM) is set to report earnings after the market closes on Thursday, July 17th. IBM is one of the largest technology and global financing companies in the world.

Big Blue is expected to earn $1.82 per share for its 2nd quarter. We expect IBM to announce earnings that will beat investors’ and analysts’ expectations. IBM has delivered 21 straight quarters of earnings growth, we are confident it will be 22.

Three Analysts have raised their estimates within the last 30 days, 1 in the past week. During the 1st quarter conference call, IBM’s management lifted its 2008 outlook by a quarter. Since the first 3 months tend to be IBM’s most challenging, we believe more upward guidance could be on the way.

Valuation wise, the company is in solid shape with a PEG ratio of 1.28, a forward PE of 13 with a projected 20% growth rate (although we expect estimates to move up), return on equity of 38.5% and more than $12 billion of cash on hand. There are plenty of reasons to like this company.

Add one more reason as IBM’s chart is also pointing to a higher stock price. IBM has posted 4 recent technical buy signals: closing yesterday at a 20 day high, closing above the 50 day moving average, the short-term moving averages passing the longer-term averages and a positive MACD crossover under ZERO.

Put it all together, solid fundamentals, a possible earnings surprise, hitting for the technical cycle and we see IBM’s shares challenging its 52 week within the 1 to 3 months.

Suggested Stop: $121.63

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