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10 pts

Opinion on  International Business Machines Corp (IBM)     Sector: Services  >  Industry: Business Services
$146 Price Target Based on Peer Valuation

Sep 08, 2008 12:42 AM GMT
Return Risk
+10.27% LOW
Associate

Strictly by the valuation numbers:

IBM has a PEG of 1.16 while the industry (Diversified Computer
Systems), has a PEG of 1.49.  Add to that the fact IBM has a projected
earnings growth rate of 10.12% implies a projected stock price of
$146.86.

IBM has a projected P/E of 11.7x while the industry has an average
projected P/E of 22.1x, implying a projected stock price of $214.96.

Here are the details of the analysis:

http://www.freestockvalueranker.com/?method=peg_pe&symbol...

Why is IBM so undervalued relative to its peers?


IBM:  This call was made on 09/08/08 @ $114.33
Rating:   Positive   $114.33 (09/08/08)
Closed:   10/19/2008 @ $92.21 (-19.35% in 41 days)
Target:   $146.00 (+27.70%) in Three months


Comments (2)

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Angelina Rose   N/A     1 point   commented 454 days ago reply

In my thought IBM is all time high. But you are saying differently.
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energycurve   69%     1 point   commented 453 days ago reply

Hello angelinarose...the stock price may be high (actually the stock price as been higher), but the valuation (the price relative to its industry peers), reflected by IBM's Projected P/E and PEG, is too low...IBM is undervalued. Why is IBM undervalued? I am curious to hear what others' opinions are. Thanks for your comment, and of course, this is just IMHO. Please see the link above which is the analysis source to double check the numbers/conclusions.

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Who voted on this idea?
Condor
Doodahdoodoo 41% 09/08/2008



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energycurve previously rated IBM
Positive +38.33% IBM $98 to $102 Target Price Range based on Avg Peer Valuations
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