Will IBM Ever See $200 Again?

The stock that was the worst performer in the Dow Jones Industrial Average for the last two years may be setting investors up for another disappointing year in 2015.

In the early goings of 2015, International Business Machines Corp. (NYSE: IBM) shares are down over 2 percent year-to-date.

Will It Ever See $200 Again?

From a longer-term perspective, IBM is quite some distance from its March 2013 all-time high ($215.90). While IBM is off by 40 percent over this time period, the S&P 500 Index has returned nearly 30 percent.

Related Link: IBM Shares Break Below 52 Week Lows

When IBM shares reached $150.50 in mid-December, it visited territory that has not been seen since January 2011, when the issue bottomed at $146.64. Perhaps the corresponding bounce to $163.00 was strictly a technical one after coming close to the psychological support level of $150.00.

Poor Fundamentals And Getting Worse

The fundamentals for the company are bad and aren't getting much better.

The stock plummeted in October when the company abandoned its 2015 earnings forecast. The company's transition in leadership and the shift to cloud computing does not appear to be going smoothly.

Weaker-than-expected software sales, lower productivity in services and customers abandoning data storage hardware in favor of the cloud are just a few problems plaguing the company.

Despite cutting jobs and shedding its unprofitable chip unit, Globalfoundries Inc., IBM shares continue to be in a free fall since flirting with $200.00 in July 2014.

Related Link: Anne Marie Baiynd On How IBM Could Go Down To $152

No Help From Wall Street Analysts

Wall Street analysts have not exactly been ahead of the freight train barreling south, as they did not express caution ahead of its huge Q3 miss.

While the Street was looking for $4.32, EPS came in at $3.68. In addition, the company missed on revenue by nearly $1 billion ($22.40 billion vs. $23.37 billion).

The most recent move by the Street was an initiation of coverage by Standpoint Research, with a Buy recommendation and $198.00 price target. Since the October debacle, only Evercore Partners had downgraded the issue, moving from Buy to Hold while lowering its price target from $210.00 to $180.00.

The Street-high price target resides with Cantor Fitzgerald, who maintains a Buy rating and a $198.00 price target.

The Street-low price target can be found at Credit Suisse, who maintains an Underperform rating and a $125.00 price target.

Only time will tell if IBM can see $200 again. But it's clear the Street doesn't think it will.

Image credit: Ruben de Rijcke, Wikimedia