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IBM Is 'Very Stable' Earnings Deliverer: Senior Analyst

IBM stock closed out 2009 by hitting a 10-year high. Will it surge again this year? Toni Sacconaghi, senior research analyst at Sanford C. Bernstein, shared his insights.

“IBM has executed exceptionally well and 2010 can be another good year,” Sacconaghi told CNBC.

“If we think back to the last decade, in 2000, IBM earned $4.5 in earnings and they’re going to do $11 in earnings this year. IBM’s almost tripled earnings over the last decade [while] the S&P is up only about 50 to 60 percent.”

Sacconaghi has an “outperform” rating on IBM , with a price target of $148. And while IBM is not a growth stock, he said it is a very stable earnings deliverer.

“And ultimately, we think it can continue to do that,” he said. “So the model we have for IBM is 10 or 12 percent EPS growth, 2 percent dividend, and the stock is trading at a 20 percent discount to the market and we think that’s very attractive.”

  • Watch Sacconaghi's Previous Appearance on CNBC (Sept. 8, 2009)

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IBM Competes With:

Dell

Accenture

Hewlett-Packard

Microsoft

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Disclosures:

Sanford Bernstein owns shares of IBM. Sanford Bernstein also provided non-investment banking securities related services to IBM during the past 12 months.

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