CNBC Stock Blog

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.

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IBM Outlook

“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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