IBM Stock (IBM) Stock: Why The Price Fell Today

By Amit Chowdhry ● Jan 11, 2022
  • The stock price of IBM (NYSE: IBM) fell by 1.58% today. This is why it happened.

The stock price of IBM (NYSE: IBM) fell by 1.58% today. Investors are responding negatively to a bearish research report.

UBS analyst David Vogt downgraded the rating on the stock to “Neutral” and reduced the price target to $124 from $136 due to concerns over the company’s operating estimates and lower earnings-per-share estimates. Plus Vogt cited an elevated valuation that leaves the shares vulnerable over the next 12 months.

A couple of months ago, IBM spun off its managed infrastructure-service operations into a standalone public company called Kyndryl.

“Our detailed bottom-up analysis of IBM’s remaining segments supports our view that roughly 50% of IBM’s top-line is unlikely to grow long-term and could decline,” wrote Vogt in the research report.

Vogt believes that IBM is unlikely able to keep up with aggressive rivals in the public cloud like Amazon’s AWS and Microsoft’s Azure.

“Although Red Hat’s revenue contribution doubles in the portfolio and improves the long-term revenue trajectory, we believe the market has already priced in that modest increase,” added Vogt.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.