IBM: new 10-year high - results hailed

(CercleFinance.com) - IBM shares soared to ten-year highs on Thursday in New York, after it unveiled solid quarterly results and a much better-than-expected outlook.


The stock closed up 9.5% at over $190, posting by far the strongest advance on the Dow Jones and closing in on its all-time highs set in early 2013.

IBM last night reported net operating profit (non-GAAP) that is up 9% at $3.6bn for Q4 2023, or $3.87 per share (+8%).

The digital services giant's sales rose by 4% to $17.4bn as reported, and by 3% at constant exchange rates, with growth particularly driven by the consulting segment (+5%).

Customer demand for AI is accelerating, and our backlog for watsonx and generative AI almost doubled between Q3 and Q4, highlights CEO Arvind Krishna.

Following this strong performance, the company has set itself the target of generating free cash flow (FCF) of around $12bn in 2024.

This is well above our previous forecast of $11bn to $11.5bn, reacted Bank of America analysts in the morning.

In a research note, BofA now says it expects two years of strong growth for 'Big Blue', with free cash flow expected to reach $13bn in 2025.

The broker reiterates its buy rating on the stock, with a target price raised from $170 to $200, praising the group's continued successful "turnaround", its defensive business portfolio, its attractive dividend yield and its underestimated expertise in AI.


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