IBM shares sliding down today, why?

Following bearish analyst coverage from UBS, International Business Machines Corp (NYSE: IBM) is trading down on Tuesday.

IBM stock was valued at $130.28 at 11:58 a.m. EST, down $4.79 or 3.5% from its previous high. The current stock trading volume of 5,939,450 is lower than its average of 6,157,691. It has a 52-week price range of $112.2 to $146.1 and a market capitalization of $135.03.

IBM was reduced from a Neutral to a Sell recommendation by UBS analyst David Vogt, who also lowered the price objective from $136 to $124.

According to The Fly, Vogt highlighted valuation concerns as the rationale for the downgrading.

According to the UBS analyst, despite a history of execution failures, the company is trading significantly above its trailing three- and five-year norms.

IBM shares are currently pricing in profit projections for 2022 and 2023, roughly 10% higher than Vogt’s estimates.

After the market closes on January 24, IBM will release its FY21 Q4 financial figures.

IBM spent almost $4 billion to build Watson Health through a series of acquisitions to make a name for itself in the healthcare industry. Truven Health Analytics, Phytel, and Merge Healthcare are all healthcare data and analytics companies that have joined the organization.

However, IBM is said to have started the process for the sale of IBM Watson Health in the hopes of making more than $1 billion.

IBM considered selling the division in early 2021, with Morgan Stanley leading the charge. According to the Wall Street Journal at the time, the unit had annual revenue of roughly $1 billion but was losing money. Furthermore, reports claim that the corporation is still losing a lot of money.

IBM enlisted the services of BofA Securities to find a buyer for Watson Health in late 2021. Bids were due yesterday, according to one source, and IBM plans to determine a winner by the end of the month. A strategic buyer, as well as other private equity firms, are said to be active.

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