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 in +4.56% Uptrend, rising for three consecutive days on June 24, 2025
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where IBM advanced for three days, in of 358 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 05, 2025. You may want to consider a long position or call options on IBM as a result. In of 82 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 284 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 July 01, 2025. 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 49 similar instances where the indicator moved out of overbought territory. In of the 49 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 59 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 .
The Moving Average Convergence Divergence Histogram (MACD) for IBM turned negative on July 02, 2025. 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 35 similar instances when the indicator turned negative. In of the 35 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 .
IBM broke above its upper Bollinger Band on June 09, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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 Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding 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 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 (10.091) is normal, around the industry mean (17.595). P/E Ratio (49.909) is within average values for comparable stocks, (51.941). Projected Growth (PEG Ratio) (2.165) is also within normal values, averaging (1.715). Dividend Yield (0.023) settles around the average of (0.022) among similar stocks. P/S Ratio (4.369) is also within normal values, averaging (13.435).
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 Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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a manufacturer of various computer products through the use of advanced information technology
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