It's been a rough week for IBM (IBM), and Friday isn't offering much relief. The stock is trading lower again as investors digest yet another analyst price target cut, a broader tech sell-off, and the lingering fallout from Tuesday's historic plunge.
JPMorgan maintained its Overweight rating on IBM but lowered its price forecast to $250 on Friday. That follows a flurry of analyst updates after the company's disappointing preliminary earnings release earlier this week. On Tuesday, Bank of America analyst Wamsi Mohan cut his price target to $280 from $330 while keeping a Buy rating, saying he was "surprised by the magnitude of the topline miss." HSBC went further, downgrading the stock to Reduce from Hold and slashing its price target to $191.
The catalyst for all this pain was Tuesday's preliminary Q2 update. IBM reported preliminary revenue of $17.2 billion, missing Wall Street estimates of $17.9 billion. Preliminary earnings came in at $2.93 per share, below the consensus estimate of $3.02 per share. The company blamed the shortfall on a reprioritization of client capital spending toward memory late in the quarter, along with execution issues, large deal slippage, and cybersecurity concerns at customers. The stock plunged more than 25% that day.
IBM is scheduled to report full second-quarter earnings on July 22, but the early numbers have already set a grim tone.
The technical picture doesn't look much better. IBM remains in a long-term downtrend, trading about 21% below its 20-day, 50-day, and 200-day simple moving averages — a sign that selling pressure is still strong. Momentum indicators are bearish: the MACD is below its signal line, and the histogram is negative, suggesting downside momentum hasn't eased. A death cross, formed when the 50-day moving average fell below the 200-day moving average back in March, continues to reinforce the longer-term bearish trend. The next key resistance level is near $236.
As of Friday's publication, IBM shares were down 3.52% at $211.34.
