IBM continual improvement in the software business

14.10.10 - Societe Generale some analysts at Societe Generale, downgrade IBM (ISIN US4592001014 / WKN 851 399) with "hold".

IBM will be on 18 October, the results published for the third quarter. According to the Société Générale solid numbers are expected. Once the orders have fallen in the service business during the second quarter, up 12% year over year, we expect for the third quarter, an increase of 5%. Sales of the service business should be increased by 4%. In the hardware business, sales should be increased, given a favorable basis of comparison to 6%, while it expects the software division's revenue growth of 5%. In the software business had over the last three quarters show a steady improvement.



IBM's management currently imagine for the full year EPS of at least $ 11.25 in prospect. Due to the continual improvement in gross margin, positive exchange rate effects and share buybacks, however, there is still room for improvement here. So you calculate at Société Générale with an EPS of $ 11.30 (PER: 12.3). The IBM shares have risen since the beginning by 8% while the share certificate from Hewlett-Packard (ISIN US4282361033 / WKN 851 301) 19% have lost value. At the current share price, the stock is fairly valued by IBM. The target price may be seen at $ 135.00.

Analysts at Societe Generale awarded the rating to "hold" for the share certificate from IBM.