IBM: Berenberg remains a seller after 'mixed' quarter
(CercleFinance.com) - Berenberg maintains its "sell" rating on IBM with a target price of 125 dollars, after the computing firm delivered a "mixed quarter.
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While IBM delivered revenue growth for the first time in 22 quarters, on the profit side the worsening of the company's gross margins resulted in a profit miss in the past quarter, the German broker points out in a report.
Berenberg also notes that the recovery in services failed to materialise and that the underlying trend in strategic imperatives is decelerating, which will delay IBM's return to growth, according to the broker.
More generally, Berenberg says it remains worried about: (1) the lack of clear growth engines; (2) the significant impact on profitability of the ongoing business transformation in a difficult IT capex spending environment; and (3) a demanding P/E valuation, given structural issues and growth profile.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
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While IBM delivered revenue growth for the first time in 22 quarters, on the profit side the worsening of the company's gross margins resulted in a profit miss in the past quarter, the German broker points out in a report.
Berenberg also notes that the recovery in services failed to materialise and that the underlying trend in strategic imperatives is decelerating, which will delay IBM's return to growth, according to the broker.
More generally, Berenberg says it remains worried about: (1) the lack of clear growth engines; (2) the significant impact on profitability of the ongoing business transformation in a difficult IT capex spending environment; and (3) a demanding P/E valuation, given structural issues and growth profile.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.