IBM (IBM, $146.94) updates earnings impact of $34 billion Red Hat-acquisition
On Friday, International Business Machines (IBM) made an update on the earnings impact of its $34 billion acquisition of open-source software firm Red Hat.
Information tech giant IBM said the acquisition could potentially reduce non-GAAP operating earnings for the full-year 2019 by $1.10 to "at least" $12.80 per share, compared to the $13.90 per share forecast the company published in its second-quarter earnings report on July 16.
However, the company reiterated its 2019 free cash flow estimate of $12 billion. It indicated that the Red Hat deal would lower the company's overall tax rate by 2 percentage points.
Looking ahead, IBM expects Red Hat to add $1.5 billion in free cashflow in 2021. It predicts a "high single-digit" growth rate in overall operating pre-tax income for the 2020-2021 period.
Last month, IBM reported non-GAAP earnings of $3.17 per share which surpassed analysts’ estimates. But the full-year guidance it issued at the time did not include the impact of its Red Hat acquisition.
IBM's RSI Indicator recovers from oversold territory
The RSI Indicator for IBM moved out of oversold territory on February 25, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 24 similar instances when the indicator left oversold territory. In of the 24 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on March 05, 2026. You may want to consider a long position or call options on IBM as a result. In of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for IBM just turned positive on March 04, 2026. Looking at past instances where IBM's MACD turned positive, the stock continued to rise in of 37 cases 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 368 cases, the price rose further within the following month. The odds of a continued upward trend are .
IBM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 58 cases where IBM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
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 Aroon Indicator for IBM entered a downward trend on March 04, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued 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 (7.148) is normal, around the industry mean (9.447). P/E Ratio (22.340) is within average values for comparable stocks, (45.129). IBM's Projected Growth (PEG Ratio) (2.332) is slightly higher than the industry average of (1.296). Dividend Yield (0.027) settles around the average of (0.026) among similar stocks. P/S Ratio (3.495) is also within normal values, averaging (26.566).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very 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 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 92, placing this stock better than average.
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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average 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.
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General Information
a manufacturer of various computer products through the use of advanced information technology
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