IBM stocks witnessing a decrease in value.
IBM's Stock Plunges Amidst Investor Concerns
In a surprising turn of events, IBM's stock took a nosedive in after-hours trading on Wall Street yesterday. Here's what's happening.
Nicknamed "Big Blue," IBM experienced a temporary hit due to the robustness of the U.S. dollar in its international business, a predicament it's faced before. However, the company managed to record a 17% surge in net income to $2.9 billion, barely nudging past analysts' predictions at $3.13 per share.
The Q4 revenue in 2022, strangely enough, remained static at $16.7 billion. But adjust for currency effects, and the revenue would've supposedly increased by 6%. For the entire year, IBM reported a 6% revenue boost to $60.5 billion. With currency adjustments, this figures would've witnesses a 12% growth spurt.
Is the Dip a Blessing in Disguise?
The latest dip offers a tempting buy opportunity. After years of stagnation, revenue has been on an upward trajectory since the separation from Kyndryl, and profits have surged thanks to a concentrated effort on higher-margin businesses. IBM anticipates mid-single-digit growth in revenue for 2023. Though the company hasn't issued specific earnings guidance, it aims to up its free cash flow from $9.3 billion to $10.5 billion. To contend with an impending economic slowdown, CEO Arvind Krishna announced a stern cost-cutting plan, which includes job cuts. About 1.5% of the global workforce might be affected, translating to approximately 3,900 jobs.
Analysts, considering revenue and margin objectives, foresee $9.59 in earnings per share for 2023, translating to a P/E ratio of roughly 15 - an exceptionally enticing number for a company focused on groundbreaking technologies like artificial intelligence, cloud, and quantum computing, not to mention a nearly 5% dividend yield.
By the way: Collect 1,000 Euros in monthly dividends - It's achievable with these stocks.
A Few Things to Keep in Mind:
- Conflicts of Interest: The CEO and majority shareholder of Börsenmedien AG, Bernd Förtsch, has gained direct and indirect positions in the financial instruments mentioned or related derivatives that could profit from the potential price shift resulting from the publication: IBM.
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- Despite IBM's stock plunge amid investor concerns, analysts predict a P/E ratio of around 15 for 2023, presenting an enticing investment opportunity considering the company's focus on cutting-edge technologies like artificial intelligence, cloud, and quantum computing.
- In 2022, IBM showed signs of recovery after years of stagnation, with revenue surging following its separation from Kyndryl, and the company anticipates mid-single-digit growth in revenue for 2023.
- The CEO, Arvind Krishna, has announced a cost-cutting plan in response to an impending economic slowdown, which may result in the loss of approximately 3,900 jobs worldwide.
- Despite the ongoing stagnation in IBM's earnings, the company's significant focus on high-margin businesses, combined with its nearly 5% dividend yield, makes it an attractive investment option for finance enthusiasts.
