International Business Machines Corporation

XTRA:IBM Stock Report

Market Cap: €197.9b

International Business Machines Valuation

Is IBM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of IBM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IBM (€217.15) is trading below our estimate of fair value (€324.2)

Significantly Below Fair Value: IBM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IBM?

Key metric: As IBM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for IBM. This is calculated by dividing IBM's market cap by their current earnings.
What is IBM's PE Ratio?
PE Ratio32.4x
EarningsUS$6.37b
Market CapUS$206.53b

Price to Earnings Ratio vs Peers

How does IBM's PE Ratio compare to its peers?

The above table shows the PE ratio for IBM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average37.5x
BC8 Bechtle
15.5x9.4%€3.9b
SAP SAP
100.3x41.4%€275.4b
SANT Kontron
13.8x19.0%€1.2b
NA9 Nagarro
20.3x17.1%€1.1b
IBM International Business Machines
32.4x10.5%€206.5b

Price-To-Earnings vs Peers: IBM is good value based on its Price-To-Earnings Ratio (32.4x) compared to the peer average (37.5x).

Price to Earnings Ratio vs Industry

How does IBM's PE Ratio compare vs other companies in the DE IT Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No more companies available in this PE range
IBM 32.4xIndustry Avg. 17.3xNo. of Companies4PE01224364860+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: IBM is expensive based on its Price-To-Earnings Ratio (32.4x) compared to the European IT industry average (17.3x).

Price to Earnings Ratio vs Fair Ratio

What is IBM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IBM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio32.4x
Fair PE Ratio43.6x

Price-To-Earnings vs Fair Ratio: IBM is good value based on its Price-To-Earnings Ratio (32.4x) compared to the estimated Fair Price-To-Earnings Ratio (43.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst IBM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€217.15
€209.42
-3.6%
18.1%€250.77€134.07n/a17
Dec ’25€216.00
€197.67
-8.5%
18.3%€239.93€128.27n/a18
Nov ’25€192.92
€197.67
+2.5%
18.3%€239.93€128.27n/a18
Oct ’25€197.60
€177.73
-10.1%
15.1%€225.85€125.57n/a18
Sep ’25€179.98
€169.42
-5.9%
13.7%€199.53€116.84n/a19
Aug ’25€176.46
€172.13
-2.5%
14.2%€205.02€120.06n/a19
Jul ’25€163.26
€167.49
+2.6%
13.4%€200.25€121.08n/a19
Jun ’25€151.58
€167.42
+10.4%
13.9%€199.71€120.76n/a18
May ’25€154.76
€171.43
+10.8%
12.9%€201.09€121.59n/a18
Apr ’25€176.50
€171.67
-2.7%
15.6%€206.82€115.41n/a18
Mar ’25€172.60
€168.65
-2.3%
15.2%€208.79€116.51n/a19
Feb ’25€170.10
€164.23
-3.5%
16.3%€206.08€115.00n/a19
Jan ’25€148.15
€137.31
-7.3%
14.9%€190.22€99.64n/a17
Dec ’24€146.80
€136.63
-6.9%
11.2%€166.94€102.59€216.0016
Nov ’24€137.50
€138.41
+0.7%
11.3%€169.55€104.19€192.9216
Oct ’24€133.30
€137.78
+3.4%
12.0%€176.36€103.19€197.6016
Sep ’24€136.50
€132.49
-2.9%
10.3%€160.49€100.88€179.9815
Aug ’24€129.85
€130.36
+0.4%
10.0%€157.75€99.15€176.4616
Jul ’24€122.30
€129.08
+5.5%
8.4%€150.06€101.89€163.2614
Jun ’24€120.35
€126.14
+4.8%
8.3%€147.24€99.98€151.5814
May ’24€114.60
€126.60
+10.5%
8.3%€147.02€99.83€154.7614
Apr ’24€119.66
€134.57
+12.5%
9.0%€153.91€102.61€176.5015
Mar ’24€120.08
€131.69
+9.7%
8.9%€150.20€100.13€172.6015
Feb ’24€122.58
€131.69
+7.4%
8.9%€150.20€100.13€170.1015
Jan ’24€131.78
€134.43
+2.0%
9.2%€157.29€105.82€148.1515
Dec ’23€140.92
€140.82
-0.07%
8.5%€160.53€111.37€146.8015

Analyst Forecast: Target price is lower than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/22 06:43
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

International Business Machines Corporation is covered by 73 analysts. 18 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
James KelleherArgus Research Company
Josep BoriAtlantic Equities LLP
Ishan MajumdarBaptista Research