IBM (IBM) Upgraded to Buy: Here's What You Should Know

Core Viewpoint - IBM has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to stock price movements based on their buying or selling actions [3]. IBM's Earnings Outlook - The upgrade for IBM indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - Analysts have raised their earnings estimates for IBM, with the Zacks Consensus Estimate increasing by 0.8% over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6]. - The upgrade of IBM to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].