International Business Machines Corporation (NYSE: IBM) has confirmed that it will release Q3 2021 earnings on Monday, October 18, 2021, after market close.
What to look for
Earnings: Stockearning’s Estimated EPS for Q3 2021 is $2.48 per share, representing a 3.88% YoY drop. For the full year, the company expects earnings per share of $10.82, representing a 24.8% growth. Historical EPS performance shows that the company has beat estimates in all of the past 12 quarters (100%). In addition, in the last quarter, the company had EPS of $2.33, topping estimates of $2.25 per share.
Revenue: The company reported a 3% revenue growth to $18.7 billion thanks to 6% and 12% growth in Cloud & Cognitive Software and Global Businesses Services, respectively. Total cloud revenue was up 13% to $7 billion, and Red Hat revenue grew 20%. For the current quarter under review, the company expects revenue of $17.74 billion, a 1.03% YoY growth. IBM expects full-year earnings per share of $10.82 on revenue of $74.93 billion.
Stock Movement: Since the last earnings release, IBM stock has gained 3.8%. Following previous earnings releases, the share price was DOWN 32 times over the past 47 quarters. So, the Historical price reaction predicts a 68% probability of share price going DOWN after IBM releases its Q3 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 4%, and the predicted move on the seventh day is 4%.
What analysts are saying
Evercore ISI analyst Amit Daryanani removed the company from the Tactical Outperform list after IBM's investors' briefing citing that the move is based on the company offering a medium-term model above investor expectations. IBM indicated that it expects a single-digit revenue growth with a high single-digit free cash flow growth projection coming above expectations. The analyst believes that the “event was viewed positively as IBM's updated business/financial model and increased transparency resonated well with investors.” Daryanani holds an In-Line rating on the stock with a price target of $150.
Credit Suisse4 analyst Matthew Cabral raised his target price on IBM shares from $167 to $176 and maintained a “buy” rating in the stock following the investor briefing in which IBM outlined its business plan, hybrid strategy, and target financial model after the MIS business spinoff. Cabral told investors in a research note that the company’s opportunity in the hybrid-first world is significantly undervalued and underappreciated.
Related News:
PNC Financial Services Group Inc. (NYSE: PNC) Q3 Earnings Expectation, Revenue Growth From Q2’s $4.7 Billion
UnitedHealth Group Inc. (NYSE: UNH) Earnings Expectation, Optum Operations To Boost Q3 Earnings