Buy signal on IBM (IBM-US)
Our system also triggered a Tactical Buy signal on April 21, 2022, that suggest a bullish acceleration. IBM has a weak track record, with a Behavioral score of 1/10, therefore the bullish signal is to be considered as mainly Tactical.
IBM is a $ 114 Bn market cap technology company which operates through five segments: Cloud & Cognitive Software, Global Business Services, Global Technology Services, Systems and Global Financing. The Cloud & Cognitive Software Solutions segment delivers integrated and secure cloud, data and artificial intelligence solutions to its clients. Global Business Services segment provides consulting, business process and application management services. Its Global Technology Services segment provides information technology (IT) infrastructure and platform services. The Systems segment provides infrastructure platforms to help meet the requirements of multi-cloud and enterprise AI workloads.
IBM announced in February it acquired Sentaca, a leading telco consulting services and solutions provider. The acquisition will accelerate IBM's hybrid cloud consulting business, adding critical skills to help communications service providers and media giants modernize on multiple cloud platforms, innovate, and transform their businesses.
Adjusted for the Kyndril spin-off, revenue grew at a solid pace for the first time in years thanks to cloud computing and consulting revenues. The company reported stronger than expected Q1-22 results, including a 8% revenue growth. For 2022, IBM is expected to post a $61 Bn revenue coupled with a 19.5% operating margin. EPS are expected to grow by double digit in the next 2 years.
The net debt standing at $44 Bn at the end of 2021 (2.5x EBITDA) remain a concern for the company.
The current dividend yield stand at 4.8%
Short term catalyst : Cloud growth, deleveraging.
This signal looks mainly Company specific but consistent with the US IT sector. There is currently 42% of US IT Services stocks in bullish Tactical signal and 58% in bullish Strategic signal.