IBM: ahead of earnings report

IBM: ahead of earnings report

2020-07-21 • Atualizado

The tech giant will announce its earnings for the second quarter on July 21 at 00:00 MT time.

What makes IBM attractive?

The coronavirus pandemic made it hard for many countries to pay dividends, but this is not the IBM’s story. Big Blue, as investors call the company, managed to increase the amount of its dividends in April no matter what. For comparison, the IBM's dividend yield is 5.5%, while Apple’s one is only 0.9%. Considerable difference! As a result, IBM joined the prestigious club of Dividend Aristocrats – companies that every year rise their payouts for at least 25 years without any stop.

Moreover, the tech giant is mostly developing in high-profitable industries such as cloud services and artificial intelligence. When the coronavirus outbreak happened, IBM was already on its way to deepen its push into cloud computing. The demand for cloud technologies rose significantly because most companies were forced to work remotely amid lockdowns, especially hybrid cloud. Thanks to the Red Hat acquisition, IBM became one of the leaders in hybrid cloud technologies.

Disadvantages of IBM

The long-term trend is negative: the IBM stock has decreased nearly 40% since 2013. Despite the fact that their dividends were rising throughout the years, retail sales were falling. Sales rose only in 2017, but dropped again less than a year later. Moreover, if we compare the IBM’s performance with the Microsoft’s one, we will notice that IBM is far below levels, that Microsoft managed to reach during the pandemic. Nevertheless, it makes it more favorable for investors now, as they have the great opportunity to buy this dip in IBM stock and make a huge profit on it, while Microsoft is considered overbought already. Also, most analysts believe that the upcoming earnings report will be the catalyst for further stock growing. Its recent push into cloud and AI technologies should boost earnings in the second quarter of this year.

Technical tips

IBM is heading towards the resistance at the high of June 3 at $129. If it breaks it through, it may jump to the next high of June 8 at $136. Support levels are $122 and $115. Follow the report on July 21 at 00:00 MT time and trade IBM!

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Your plan to trade IBM:

  1. You download the Metatrader 5 .
  2. You open the MT5 account in your personal area.
  3. After that, open all trading instruments by clicking “show all” at the “Market Watch” window.
  4. Start trading!

 TRADE NOW

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