IBM (IBM, $140.43) closes its $34 billion acquisition of Red Hat (RHT, $187.70)
International Business Machines (IBM) completed its $34 billion acquisition of software firm Red Hat, as announced by the companies on Tuesday.
Initiated in October, the deal involves IBM paying $190 per share in cash for Red Hat, a price representing a 63% premium over the stock's price before the merger was announced. This marks IBM’ s biggest deal ever.
Following the acquisition, Red Hat will be a part of IBM’s Hybrid Cloud division, according to the original announcement.
IBM had previously indicated that the merger would boost its cloud infrastructure.
IBM in upward trend: price expected to rise as it breaks its lower Bollinger Band on December 18, 2024
IBM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 33 cases where IBM's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
IBM moved above its 50-day moving average on December 19, 2024 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for IBM crossed bullishly above the 50-day moving average on November 29, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where IBM advanced for three days, in of 345 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 270 cases where IBM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for IBM moved out of overbought territory on December 09, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 46 similar instances where the indicator moved out of overbought territory. In of the 46 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on December 17, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on IBM as a result. In of 75 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for IBM turned negative on December 16, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 40 similar instances when the indicator turned negative. In of the 40 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where IBM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. IBM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.489) is normal, around the industry mean (31.503). P/E Ratio (32.713) is within average values for comparable stocks, (49.985). IBM's Projected Growth (PEG Ratio) (7.431) is very high in comparison to the industry average of (1.748). Dividend Yield (0.030) settles around the average of (0.023) among similar stocks. P/S Ratio (3.347) is also within normal values, averaging (35.888).
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a manufacturer of various computer products through the use of advanced information technology
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