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International Business Machines Corporation (IBM), headquartered in Armonk, New York, provides integrated solutions and services. With a market cap of $207.3 billion, the company offers analytics, IT infrastructure, cloud, business operations and automations, cybersecurity, data storage, application development, asset management, blockchain, software, and consulting solutions. The provider of global hybrid cloud and AI is expected to announce its fiscal third-quarter earnings for 2026 after the market closes on Wednesday, Oct. 21.
Ahead of the event, analysts expect International Business Machines to report a profit of $2.90 per share on a diluted basis, up 9.4% from $2.65 per share in the year-ago quarter. The company has surpassed or met Wall Street’s EPS estimates in its last four quarterly reports.
For the full year, analysts expect International Business Machines to report EPS of $12.33, up 6.4% from $11.59 in fiscal 2025. Its EPS is expected to rise 7.2% year over year to $13.22 in fiscal 2027.
IBM stock has underperformed the S&P 500 Index’s ($SPX) 14% gains over the past 52 weeks, with shares down 22.1% during this period. Similarly, it notably underperformed the State Street Technology Select Sector SPDR ETF’s (XLK) 38.9% gains over the same time frame.
IBM’s underperformance stemmed from a late-June pullback in enterprise spending as clients prioritized securing AI infrastructure amid supply constraints. Management stressed demand remained intact, pointing to a $500 million infrastructure backlog as evidence of pending revenue.
On Jul. 22, IBM shares fell over 2% after reporting its Q2 results. Its adjusted EPS of $2.93 matched Wall Street expectations. The company’s revenue was $17.16 billion, missing Wall Street forecasts of $17.17 billion.
Analysts’ consensus opinion on IBM stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 24 analysts covering the stock, 11 advise a “Strong Buy” rating, two suggest a “Moderate Buy,” 10 give a “Hold,” and one recommends a “Strong Sell.” IBM’s average analyst price target is $252.48, indicating a potential upside of 14.8% from the current levels.
