UBS analyst Steve Milunovich upgraded IBM from Neutral to Buy and raised his target price from $210 to $235. The shares are up $2.50 to $212, or just over 1% when the S&P 500 us up 1%.
Source: FULL ARTICLE at Forbes Latest
Tag Archives: Steve Milunovich
Why This Important Dow Stock Jumped 1.5% Today
By Anders Bylund, The Motley Fool
Filed under: Investing
IBM is a giant among Dow stocks. The IT hardware and services veteran accounts for 11% of the Dow Jones Industrial Average index by weight, and its price swings always make a big difference to the Dow’s daily value changes.
This morning, Big Blue‘s shares jumped as much as 1.5% on an analyst upgrade. That’s enough to add 25 points to the Dow’s overall value, thanks to IBM‘s $211 share price, and a major driver of today’s bullish Dow action.
The fuel for this morning’s rocket ride came from star analyst Steve Milunovich, formerly of Merrill Lynch but now a managing director at Swiss powerhouse UBS. Milunovich is the kind of rainmaker who can move even blue-chip mega caps like IBM with a stroke of his pen.
In this case, Milunovich boosted IBM from “hold” to “buy” with a $235 price target. That would be a 12% upside to Tuesday’s closing prices.
He paints Big Blue as a company in transition, “well positioned” to become a leader in so-called “IT-as-a-service” cloud computing. That’s a model where businesses kick their IT operations out as a stand-alone business or divisions, moving a traditional cost center into the realm of flexible and potentially profitable operations.
These IT-focused entities are often powered by advanced cloud-computing solutions and big outsourcing contracts — two areas where IBM is both huge and growing.
Milunovich calls this a “sound strategy,” and it’s hard to disagree.
IBM has been heading in this direction for many years now, but the IT-as-a-service trend is primed for massive growth in the near future as the idea enters the mainstream. IBM stock has already crushed its Dow Jones peers over the last five and 10 years, and it’s likely to keep on keeping on.
So this man among Dow stock boys looks primed for further gains. Milunovich sees a 12% return for the next year, and I believe that’s an appropriate long-term growth rate for the next five years as well. In fact, I just started a long-term outperform CAPScall on IBM to underscore the comprehensive power of IBM‘s cloud-focused industry muscle.
The amount of data we store every year is growing by a mind-boggling 60% annually! To make sense of this trend and pick out a winner, The Motley Fool has compiled a new report called “The Only Stock You Need to Profit From the NEW Technology Revolution.” The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. To get instant access to the name of this company transforming the IT industry, click here — it’s free.
The article Why This Important Dow Stock Jumped 1.5% Today originally appeared on Fool.com.
Fool contributor Anders Bylund holds no position in any company mentioned. Check out
Source: FULL ARTICLE at DailyFinance
Are Apple, Google, and Microsoft Switching Hats?
By Douglas Ehrman, The Motley Fool
Filed under: Investing
If you spend much time in the financial blogosphere, you come across a common theme when things start to get shaken up: Is company X the new company Y? Right now, with Apple languishing just above its 52-week low, Google sitting at its 52-week high, and Microsoft presumably happy to be a part of the conversation again, there is a nice series of these comparisons to be made.
Is Apple the new Microsoft? Is Google the new Apple? And almost by default: Is Microsoft the new Google? As odd and improbable as this may all seem, particularly if we look back at where each of these companies was sitting last fall, these are legitimate questions that should be asked.
Is Apple the new Microsoft?
History is littered with tales of great empires falling due to stagnation, complacency, and bad timing. Since the stock‘s high above $700 per share last September, Apple shares have tumbled 40%. One of the areas in which the company has been criticized is in the lack of new innovation being seen out of Cupertino. The company has drawn attention over its rumored entry into wearable tech with the iWatch, but there is no indication of when this product might be released.
In a recent research note, UBS analyst Steve Milunovich identified the problem, but warns that investors will likely need to be patient. He also commented on the company’s margins:
And a 30 percent operating margin long-term historically has proven very difficult to protect. We are no longer looking for the gross margin to move back over 40 percent this year. So while we don’t see it coming down a lot, I think longer-term it is a risk.
The new Apple products slated for July are only incremental improvements over existing models. Each of these were the types of problems that caused Microsoft to stagnate for nearly a decade. The company remained profitable, just not the hot name. If Apple is to avoid this fate, it needs to up its game soon.
Is Google the new Apple?
As is the nature of empires, when one falls there is always another standing ready to take its place. While I have long maintained that Google was the true king of tech, based largely on its better-diversified business model, the company seems to have embraced this new role. As Apple shares have fallen, Google is up double-digits this year. The company has been able to successfully grow revenue across market segments, is going to market with Google Glass, and continues to whittle away at Apple’s lead in devices.
While it is hard to compare a device company to a search company per se, it is Google’s tenacity in expanding into new markets that’s allowing it to perform as well as it is. The company was able to grow its app revenue by six times for 2012, it controls an estimated 75% of the search market in the …read more
Source: FULL ARTICLE at DailyFinance
Apple: UBS Cuts Ests; Slices Target To $650 From $700
By Eric Savitz, Forbes Staff UBS analyst Steve Milunovich sliced his estimates for Apple for both FY 2013 and FY 2014 to reflect the findings of a new survey by Consumer Intelligence Research Partners that finds customers shifting to cheaper iPhones with less memory.
Source: FULL ARTICLE at Forbes Latest
Apple: Is WSJ's iPhone Production Cut Story Old News?
By Eric Savitz, Forbes Staff Apple shares are down sharply Monday after the Wall Street Journal reported that the company has cut orders for iPhone 5 related components in response to soft demand. But is there anything really new here? UBS analyst Steve Milunovich points out in a research note that the Journal says the cuts […]
Source: FULL ARTICLE at Forbes Latest