International Business Machines (NYSE:IBM) Trading 12.5% Higher – Still a Buy?

International Business Machines Corporation (NYSE:IBM)’s stock price was up 12.5% during trading on Thursday . The stock traded as high as $253.63 and last traded at $253.1360. Approximately 25,286,827 shares changed hands during trading, an increase of 310% from the average daily volume of 6,172,559 shares. The stock had previously closed at $225.00.

Key Headlines Impacting International Business Machines

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: IBM and the U.S. Department of Commerce announced a Letter of Intent to create America’s first purpose-built quantum foundry, with IBM’s new venture “Anderon” expected to receive a proposed $1 billion CHIPS award and a matching $1 billion IBM commitment. Investors are reacting to the scale of the support and the potential for IBM to become a key supplier in the emerging quantum ecosystem. Article title: IBM and U.S. Department of Commerce Announce America’s First Purpose-Built Quantum Foundry, Supported by Proposed $1 Billion CHIPS Award
• Positive Sentiment: The U.S. government’s broader plan to invest $2 billion across nine quantum computing companies is lifting IBM along with other quantum names, reinforcing the market view that quantum computing is becoming a strategic national priority. Article title: US to invest $2 billion in IBM, other quantum computing firms
• Positive Sentiment: Analysts and traders are framing IBM as a leading “quantum play,” and unusual options activity suggests speculation is building around further upside if the foundry project advances and attracts more commercial demand. Article title: Traders think this legacy tech stock is the ultimate quantum play

Analysts Set New Price Targets

A number of brokerages have issued reports on IBM. UBS Group raised shares of International Business Machines from a “sell” rating to a “neutral” rating and set a $236.00 price objective for the company in a research report on Wednesday, February 25th. Evercore upped their price objective on shares of International Business Machines from $330.00 to $345.00 and gave the stock an “outperform” rating in a research report on Thursday, January 29th. JPMorgan Chase & Co. reduced their price objective on shares of International Business Machines from $317.00 to $283.00 and set a “neutral” rating for the company in a research report on Wednesday, March 18th. Argus set a $360.00 price objective on shares of International Business Machines in a research report on Friday, January 30th. Finally, HSBC raised shares of International Business Machines from a “reduce” rating to a “hold” rating and upped their price objective for the stock from $218.00 to $231.00 in a research report on Tuesday, April 28th. One investment analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating and seven have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, International Business Machines presently has an average rating of “Moderate Buy” and an average price target of $294.41.

International Business Machines Trading Up 12.5%

The company has a debt-to-equity ratio of 1.75, a current ratio of 0.80 and a quick ratio of 0.76. The stock has a market capitalization of $237.92 billion, a PE ratio of 22.38, a PEG ratio of 2.30 and a beta of 0.58. The stock’s 50 day simple moving average is $238.52 and its two-hundred day simple moving average is $272.95.

International Business Machines (NYSE:IBM) last released its earnings results on Wednesday, April 22nd. The technology company reported $1.91 earnings per share for the quarter, beating analysts’ consensus estimates of $1.81 by $0.10. The firm had revenue of $15.92 billion for the quarter, compared to analysts’ expectations of $15.60 billion. International Business Machines had a net margin of 15.61% and a return on equity of 37.23%. The company’s quarterly revenue was up 9.5% on a year-over-year basis. During the same period in the previous year, the company earned $1.60 earnings per share. On average, sell-side analysts expect that International Business Machines Corporation will post 12.4 EPS for the current year.

International Business Machines Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, June 10th. Shareholders of record on Friday, May 8th will be paid a $1.69 dividend. The ex-dividend date is Friday, May 8th. This is a positive change from International Business Machines’s previous quarterly dividend of $1.68. This represents a $6.76 dividend on an annualized basis and a yield of 2.7%. International Business Machines’s dividend payout ratio is presently 59.77%.

Insiders Place Their Bets

In related news, Director Michael Miebach bought 434 shares of the company’s stock in a transaction on Wednesday, February 25th. The shares were purchased at an average cost of $233.33 per share, for a total transaction of $101,265.22. Following the completion of the purchase, the director directly owned 434 shares in the company, valued at $101,265.22. The trade was a ∞ increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through this link. 0.27% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in IBM. Family CFO Inc purchased a new position in International Business Machines in the fourth quarter valued at about $25,000. Basepoint Wealth LLC purchased a new position in International Business Machines in the fourth quarter valued at about $25,000. Portus Wealth Advisors LLC purchased a new position in International Business Machines in the first quarter valued at about $26,000. Joseph Group Capital Management purchased a new stake in shares of International Business Machines during the 4th quarter valued at approximately $28,000. Finally, Cornerstone Financial Management LLC purchased a new stake in shares of International Business Machines during the 4th quarter valued at approximately $28,000. 58.96% of the stock is currently owned by hedge funds and other institutional investors.

About International Business Machines

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM’s principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.