IBM Shares Surge 11% Following Better-Than-Expected Q4 Earnings Report

Summary

  • IBM (NYSE:) recorded an increased stock value of over 11% on Thursday following its Q4 earnings report.
  • IBM outperformed expectations by posting a fourth-quarter EPS of $3.87 with revenue reaching $17.38 billion which surpassed analysts’ estimates.
  • For the full fiscal year, IBM anticipates a free cash flow of $12 billion, which surpasses analysts’ projections of $10.92 billion.
  • In terms of revenue growth, IBM is projected to achieve an increase of roughly 4-6% by 2024.

IBM’s Stock Performance

IBM (NYSE:) saw a jump of over 11% in shares on Thursday as Q4 results exceeded expectations. The company reported an EPS of $3.87 and revenue of $17.38 billion, beating the market forecast of $3.77 and $17.23 billion, respectively.

Breakdown of IBM’s Revenue

Revenue from software sales contributed $7.51 billion, which showed a 3.1% YoY increase. Consulting segment revenue was $5.05 billion, a 5.8% YoY increase. Meanwhile, the company’s infrastructure segment generated $4.6 billion in revenue, up by 2.7% YoY.

IBM’s Optimistic Future Projections

For the upcoming year, IBM expects a free cash flow of $12 billion. This is an optimistic forecast compared to analysts’ $10.92 billion prediction. The software firm also sees potential for revenue growth of around 4-6% in 2024, surpassing Wall Street’s expectation of about a 3% growth.

Analysts’ Views on IBM

Analysts from Evercore ISI increased their price target by $15 to $215 per share on the Outperform-rated stock. On the other hand, BofA Securities analysts upgraded their target price to $210 while maintaining a Buy recommendation. They believe the company’s strong cash flow trajectory could result in nearly $13 billion in FCF in FY 2025.

Impact on Forex and Trading

With resounding quarterly results and a favorable outlook, IBM’s performance can greatly influence the trading landscape. As IBM is a key player in the NYSE, any significant movement in its stock price could potentially impact the valuation of correlated assets in the trading market.

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