International Business Machines Corporation

XTRA:IBM Stock Report

Market Cap: €184.6b

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 (€199.68) is trading below our estimate of fair value (€315.9)

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?

Other financial metrics that can be useful for relative valuation.

IBM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3.9x
Enterprise Value/EBITDA16.5x
PEG Ratio2.9x

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 Average36x
BC8 Bechtle
16.3x10.1%€4.1b
SAP SAP
93x40.8%€255.3b
SANT Kontron
12.5x19.1%€1.1b
NA9 Nagarro
22.1x16.3%€1.2b
IBM International Business Machines
30.6x10.5%€195.0b

Price-To-Earnings vs Peers: IBM is good value based on its Price-To-Earnings Ratio (30.6x) compared to the peer average (36x).

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
Industry Avg.n/a16.0%
 n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a16.0%
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No more companies

Price-To-Earnings vs Industry: IBM is expensive based on its Price-To-Earnings Ratio (30.6x) compared to the European IT industry average (17.6x).

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 Ratio30.6x
Fair PE Ratio43.3x

Price-To-Earnings vs Fair Ratio: IBM is good value based on its Price-To-Earnings Ratio (30.6x) compared to the estimated Fair Price-To-Earnings Ratio (43.3x).

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€199.68
€201.74
+1.0%
18.3%€244.87€130.91n/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€102.59n/a16
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
Nov ’23€139.30
€140.82
+1.1%
8.5%€160.53€111.37€137.5015

Analyst Forecast: Target price is less than 20% higher than the current share price.

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