Yahoo Finance IBM Stock Had a March Rally: Will It Continue?
Can Strategic Imperatives Turn IBM Around in Fiscal 1Q16?
After reaching multiyear lows, IBM stock is on the rise
IBM (IBM) is reeling under the pressure of revenue declines. Fiscal 4Q15 marked the 15th consecutive quarter that the company has failed to report revenue growth. Consequently, its stock touched a five-year low in late 2015. Following its fiscal 4Q15 results, the stock fell to one of its lowest levels since 2011.
However, since February 2016, IBM stock has started to rebound, as you can see in the graph below. IBM is currently in a transition and transformation phase. It’s shifting to rapidly growing areas such as security, cloud, big data, analytics, and mobile. It looks as though IBM’s initiatives to grow Strategic Imperatives through acquisitions and partnerships have started to pay off.
Strategic Imperatives growth and improved ratings gave much-needed boost to IBM stock
Morgan Stanley’s increased price target for IBM stock from $168 to $195 has improved Market sentiment toward IBM stock. In her report, Katy L. Huberty of Morgan Stanley argued that the Market has “underappreciated” IBM’s growth potential, which is reflected in its share prices. IBM stock touched a five-year low in late 2015. Its fiscal 4Q15 results marked the 15th consecutive quarter that the company failed to report revenue growth. The stock fell to one of its lowest levels since 2011.
IBM touched its 52-week high in April 2016
March 2016 turned out to be the best month for IBM stock in more than a decade. On March 31, 2016, IBM stock closed at $151.45. That’s an increase of nearly 16.3% for the month. On April 5, 2016, the stock rose to $176.30, a 52-week high.
Huberty believes that compared to its peers, IBM is transitioning at a faster pace toward rapidly growing segments. If IBM could continue its growth momentum in Strategic Imperatives coupled with a check on costs, it could improve Market sentiment and give a boost to IBM stock.
March 2016 turned out to be good for select technology stocks. Earlier in the series, we looked at the US dollar in March. The weakening of the dollar (UUP) supported major technology stocks such as Apple (AAPL), Microsoft (MSFT), Facebook (FB), and Intel (INTC). They rose 13.3%, 8.2%, 7.3%, and 10.54%, respectively, in March.
In the next part, we’ll see how IBM has boosted Watson capabilities through its strategic acquisitions.
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