Is February a good month for buying IBM shares? | Invezz


IBM (NYSE: IBM) shares have weakened from $131 below $118 since the middle of January, and the current price stands around $121. This company offers a very good opportunity for investors, and most financial analysts are also expecting its price to rise considerably in the next several years.

Fundamental analysis: IBM  expects to post annual revenue growth for 2021

International Business Machines Corporation (IBM) is an American multinational technology company that employs more than 350,000 employees in 170 countries. IBM continues to be a major player in the IT business, but its stock has weakened after the company missed Q4 revenue estimates.

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The company reported Q4 results in January; total revenue has decreased by -6.5% Y/Y to $20.37B while Q4 GAAP EPS was $1.41 (beats by $0.14). Total revenue has decreased above the expectations ( missed by $260M), but the gross margin was higher than the estimate.

Cloud & cognitive software sales dropped 5%, global business services fell 3%, but the company expects to post annual revenue growth for 2021.

“We made progress in 2020, growing our hybrid cloud platform as the foundation for our clients’ digital transformations while dealing with the broader uncertainty of the macro environment. The actions we are taking to focus on hybrid cloud and AI will take hold, giving us the confidence we can achieve revenue growth in 2021,” said CEO Arvind Krishna.

IBM recently announced its plans to establish a center in Bengaluru (India) together with Larsen & Toubro Infotech to integrate solutions with customers. The company has declared a $1.63 per share quarterly dividend in line with previous, and the current dividend yield stands around 5.3%.

IBM is a stable company with good fundamentals and with a market capitalization of $108B; this stock is still undervalued relative to the market. This company offers a very good opportunity for investors, and maybe now could be a good moment to invest in IBM shares.

Technical analysis: IBM shares weakened after the company missed Q4 revenue estimates

IBM shares have weakened from $131 below $118 since the middle of January, and the current price stands around $121. If the price falls even more in the upcoming weeks, every price in a range from $100 – $105 could be a very good opportunity for buying IBM shares.

Data source: tradingview.com

The important support levels are $115 and $110, $130 and $140 represent the resistance levels. If the price jumps above $130, it would be a “buy” signal, but if the price falls below $115, it would be a strong “sell” signal.

Summary

IBM reported Q4 results in January; total revenue has decreased by -6.5%, but the company expects to post annual revenue growth for 2021. IBM shares weakened after the company missed Q4 revenue estimates, but with a market capitalization of $108B, this stock is still undervalued relative to the market.



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