Analyst: Muted Expectations For IBM Heading Into Q1 Earnings

Expectations for IBM (NYSE: IBM)'s first quarter report are "muted," but KeyBanc says there's reason to be "positively biased" heading into the print.

The Analyst

KeyBanc Capital Markets' Arvind Ramnani maintains a Sector Weight rating on IBM's stock with no assigned price target.

The Thesis

IBM's performance over the past year is underwhelming, but the company could surprise investors with an "upbeat tone" in its earnings release scheduled for April 17, Ramnani said in a research report. The company showed a positive tone during its analyst day presentation and attendance at the IBM Think customer event was encouraging.

"Big Blue" is also expected to report encouraging updates related to artificial intelligence, blockchain, cloud and other new business lines in its earnings report, the analyst said. As such, even a modest upside in the quarter versus expectations could prove to be a positive catalyst for the stock.

Ramnani is modeling IBM to earn $2.42 per share in the first quarter on revenue of $18.79 billion. By comparison, the Street's consensus estimate is calling for the company to earn $2.41 per share on revenue of $18.82 billion.

Price Action

Shares of IBM are trading around $157 and are up about 1.8 percent in 2018.

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