Is IBM’s Recent Share Price Strength Still Justified by Its Valuation?

International Business Machines (IBM) keeps edging higher, with the stock up roughly 4% over the past month and nearly 13% in the past 3 months, inviting a closer look at what might be driving sentiment.

See our latest analysis for International Business Machines.

That recent strength is not happening in isolation. The latest share price of $300.98 sits on top of a solid year to date share price return of roughly 37 percent and a powerful multi year total shareholder return north of 200 percent, suggesting momentum is still firmly with IBM as investors warm to its cloud and AI pivot.

If IBM’s run has you rethinking your tech exposure, it could be a good moment to see what else is gaining traction among high growth tech and AI stocks.

Yet with IBM now trading slightly above the average analyst target and at a premium to its intrinsic value estimates, investors face a key question: is there still meaningful upside left, or is future growth already fully priced in?

Most Popular Narrative Narrative: 2.4% Overvalued

With IBM closing at $300.98 versus a most popular narrative fair value of $293.89, expectations are running slightly ahead of the modelled outlook.

The analysts have a consensus price target of $281.316 for International Business Machines based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $350.0, and the most bearish reporting a price target of just $198.0.

Read the complete narrative.

Want to see what justifies this richer setup? The narrative leans on steady expansion in revenue, rising margins, and a punchy future earnings multiple. Curious how those pieces fit together and what it assumes about IBM’s profit engine by the late 2020s? Dive in to unpack the full story behind that fair value line.

Result: Fair Value of $293.89 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upbeat narrative could be tested if macro uncertainty slows consulting spend or if Red Hat and broader software growth undershoot those mid single digit targets.

Find out about the key risks to this International Business Machines narrative.

Build Your Own International Business Machines Narrative

If that outlook does not quite match your view, or you prefer digging into the numbers yourself, you can build a fresh narrative in just a few minutes: Do it your way.

A great starting point for your International Business Machines research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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