Trading IBM Stock After Full Year Guidance Lift

October 25, 2022 19:22

IBM was once the darling of the tech sector before high fliers such as Amazon and Apple took over. However, so far this year, while the S&P 500 index is down around 20%, IBM shares are down around 3%.  

The company's share price has traded in a range for much of this year and has already bounced 13% higher from the lower part of the range. The recent earnings report shows signs of growth but analysts still remain mixed.  

Learn more below.

Stock: International Business Machines Corporation
Symbol for Invest.MT5 Account: IBM
Date of Idea: 25 Oct 2022
Time Line: 1 - 6 months
Entry Level: $132.00
Target Level: $160.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

IBM Lifts Full-Year Revenue Guidance

In its most recent quarterly earnings report, IBM beat analyst expectations for earnings and revenue. Earnings per share came in at $1.81 per share against an expected $1.77 per share. Revenue came in at $14.11 billion against an expected $13.51 billion.  

CEO Arvind Krishna stated in the earnings release that “[we] now expect full-year revenue growth above our mid-single digit model.” This has been helped by recent acquisitions of consulting firm Dialexa, software start-up company and the launch of new servers containing its Power10 chips.  

Even with the strong US dollar – which IBM believe will shave 7% of its full-year revenue forecast – the company increased its guidance to achieve $10 billion in free cash flow. The company’s focus on returning to growth seems to be reflected in its latest quarterly figures but it is still early days.  

IBM’s growth prospects seemed to increase last November when it spun off its managed infrastructure business into Kyndryl Holdings. This was a poor-performing unit and has helped IBM to focus on three core divisions which include software, consulting and infrastructure.  

Year on year, the consulting division grew by 16%, software revenue by 15% and infrastructure revenue by 23%. The key question now is whether or not IBM can sustain this growth quarter by quarter.

IBM Stock Forecast - What do the Analysts Say? 

According to analysts polled by TipRanks for an IBM stock forecast in the past 3 months, there are currently 5 buy, 2 holds and 1 sell rating on the stock. The highest price level for an IBM stock forecast is $160.00 with the lowest price target at $111.00. 

The average price target for an IBM stock forecast is $140.63.

Source: TipRanks, 25 Oct 2022


An Example Trading Idea for the IBM Stock Price

An example trading idea for the IBM share price could be as follows:  

  • Buy the stock at $132.00 to allow for current market volatility. 
  • Target just below the highest analyst price target at $160.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 IBM shares:  
    • If target is reached = $280.00 potential profit ($160.00 - $132.00 *10 shares).

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering that IBM stock was down around 8% from the high of the year so far.    

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in IBM stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy IBM Stock in 4 Steps  

With Admirals, you can buy shares in companies like IBM with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the Trader’s Room.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.   
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance. 


Click on the banner below to buy IBM stock today! ▼▼▼ 

Do You See the IBM Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance IBM's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.