Yahoo Finance International Business Machines Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
International Business Machines Corporation (NYSE:IBM) shareholders are probably feeling a little disappointed, since its shares fell 2.5% to US$165 in the week after its latest first-quarter results. Revenues were US$14b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.72, an impressive 32% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for International Business Machines
Taking into account the latest results, International Business Machines' 18 analysts currently expect revenues in 2024 to be US$63.2b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 2.6% to US$8.65 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$63.6b and earnings per share (EPS) of US$8.66 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$181, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values International Business Machines at US$215 per share, while the most bearish prices it at US$130. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that International Business Machines' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.5% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 5.0% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.5% annually for the foreseeable future. So although International Business Machines' revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that International Business Machines' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple International Business Machines analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - International Business Machines has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
