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IBM is downgraded to Hold with $200 price target at Goldman. The team says the business model...

IBM is downgraded to Hold with $200 price target at Goldman. The team says the business model isn't working as hoped and the company may see intensifying pressure on its high-margin revenue streams in coming quarters. The 2013 EPS estimate is cut to $16.61 from $16.71; 2014 to $17.92 from $18.10. Shares -1% premarket.
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Comments (5)
  • 2015 Roadmap Roadkill
    , contributor
    Comments (2) | Send Message
     
    No surprises here. You can only cut expenses for so long. At some point you actually have to sell something! Sam's $20 EPS in 2015 declaration before he retired in 2010 (remember his $10 EPS roadmap in 2010? Wonder how that timeframe was chosen) put IBM on track for this train wreck. Unfortunately, Genni R. is from the same school as Sammy. Shame so many good and talented IBMers had to loose their jobs in the road to $20 in '15 (Roadmap Roadkill)!
    9 Jul 2013, 09:21 AM Reply Like
  • Jack Shaughnessy
    , contributor
    Comments (4) | Send Message
     
    Well said Roadmap Roadkill. IBM is in for some rough times ahead given their consistently poor record of top line growth performance and grim future sales projections across all their groups... Genni R has just carried on with Sam P's game plan of cost takeout. More workforce "adjustments" will be coming and the talent pool, along with the reputation of IBM will continue to slide as a hi-tech company to avoid at all costs for work. Don't be surprised if they remove the entire 401K matching program rather than just delay payment. Hope Genni gets some rounds of golf in at Augusta before next year's Masters, because she won't after.
    9 Jul 2013, 11:03 AM Reply Like
  • WACG
    , contributor
    Comments (377) | Send Message
     
    All of these "analysts" are just guessing and generally mimic each other and the herd. Here's how it works:

     

    A. See what you "colleagues" have guessed and guess about the same.

     

    or (the scientific method)

     

    B. Take last year's (quarter's) earnings and multiply by a random number between 0.95 and 1.05.

     

    There! You are an analyst!!
    9 Jul 2013, 04:52 PM Reply Like
  • Billy22
    , contributor
    Comments (36) | Send Message
     
    For at least 10 years, IBM has been running its business based on Financial Engineering trickery. The day of reckoning of all this nonsense is now upon the company. IBM WILL learn a very painful lesson that employees are NOT expenses, especially sales and client facing folks of which thousands upon thousands of jobs have been cut to make a lousy EPS goal. IBM needs to IMMEDIATELY begin to invest in its employees, do some hiring instead of firing, and stop buying Tens of Billions of its stock back, typically at the wrong time, and invest in its people and its business! Lord knows, If it continues on its current financial, cost cutting, employee cutting, stock buyback mode, the company will quickly be in a state the likes of which have not been seen since the last days of John Akers....
    9 Jul 2013, 07:13 PM Reply Like
  • stoj
    , contributor
    Comments (429) | Send Message
     
    you can never cut enought, once you are setting a business standard, with fierce and open competition, as is, in the current transformation of big data and cloud services, the standards are forming, price of service is and will increasingly become the main differentiator, almost as commoditized as oil/gold, on top of this, IBM needs to shrink "faster and before" the pullback of government programs and the coming lost European decade. The important thing is, they are profitable, and a projection of increased profitability ( by cutting ) is both a ( per stock ) growth and hedging against "bad times" in EU, it is also the opposite of "financial trickery" since cutting employment cost and outstanding number of shares is quite normal in a stagnant global economy, on the other hand we have a whole pletora of alternative companies balooning and growing, sometimes merely for the sake of growth. The time where you had to have exceptional top line growth, to be part of the tech sector is vanished forever, but some people even been through it, still don't understand why
    9 Jul 2013, 09:53 PM Reply Like
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