International Business Machines Corporation - Revision history

95.149.161.192 at 21:12, 11 August 2023

2023-08-11T21:12:40Z

← Older revision		Revision as of 22:12, 11 August 2023
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	~~Link to presentation: https://youtu.be/ytJ4G1fhhgs<nowiki/>~~{{Infobox company		{{Infobox company
	\| name = International Business Machines Corporation		\| name = International Business Machines Corporation
	\| logo = IBM logo.svg		\| logo = IBM logo.svg
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	Finally, the Financing segment assists clients by providing a variety of services such as lease financing, instalment payment options, loan financing, and short-term working capital solutions.		Finally, the Financing segment assists clients by providing a variety of services such as lease financing, instalment payment options, loan financing, and short-term working capital solutions.

			<Youtube>ytJ4G1fhhgs</Youtube>

	== Team ==		== Team ==

95.149.161.192: Undo revision 10486477 by 95.149.161.192 (talk)

2023-08-11T21:09:49Z

Undo revision 10486477 by 95.149.161.192 (talk)

← Older revision		Revision as of 22:09, 11 August 2023
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	{{Infobox company		Link to presentation: https://youtu.be/ytJ4G1fhhgs<nowiki/>{{Infobox company
	\| name = International Business Machines Corporation		\| name = International Business Machines Corporation
	\| logo = IBM logo.svg		\| logo = IBM logo.svg
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	\| website = {{official URL}}		\| website = {{official URL}}
	}}		}}

	~~<Youtube>ytJ4G1fhhgs</Youtube>~~

	Headquartered in Armonk, New York, International Business Machines Corporation (IBM) is a global provider of integrated solutions and services. The company's operations are divided into four primary segments: Software, Consulting, Infrastructure, and Financing.		Headquartered in Armonk, New York, International Business Machines Corporation (IBM) is a global provider of integrated solutions and services. The company's operations are divided into four primary segments: Software, Consulting, Infrastructure, and Financing.

95.149.161.192 at 21:08, 11 August 2023

2023-08-11T21:08:41Z

← Older revision		Revision as of 22:08, 11 August 2023
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	~~Link to presentation: https://youtu.be/ytJ4G1fhhgs<nowiki/>~~{{Infobox company		{{Infobox company
	\| name = International Business Machines Corporation		\| name = International Business Machines Corporation
	\| logo = IBM logo.svg		\| logo = IBM logo.svg
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	\| website = {{official URL}}		\| website = {{official URL}}
	}}		}}

			<Youtube>ytJ4G1fhhgs</Youtube>

	Headquartered in Armonk, New York, International Business Machines Corporation (IBM) is a global provider of integrated solutions and services. The company's operations are divided into four primary segments: Software, Consulting, Infrastructure, and Financing.		Headquartered in Armonk, New York, International Business Machines Corporation (IBM) is a global provider of integrated solutions and services. The company's operations are divided into four primary segments: Software, Consulting, Infrastructure, and Financing.

>P.M. Jorgan: Added link to presentation

2023-08-11T12:53:29Z

Added link to presentation

← Older revision		Revision as of 13:53, 11 August 2023
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	{{Infobox company		Link to presentation: https://youtu.be/ytJ4G1fhhgs<nowiki/>{{Infobox company
	\| name = International Business Machines Corporation		\| name = International Business Machines Corporation
	\| logo = IBM logo.svg		\| logo = IBM logo.svg

>P.M. Jorgan: /* Primary risk factors */

2023-08-11T10:01:18Z

Primary risk factors

← Older revision		Revision as of 11:01, 11 August 2023
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	The overall business line sizes are summarised below in the pie chart:		The overall business line sizes are summarised below in the pie chart:
	[[File:Pie.png\|center\|thumb\|301x301px]]Recently, IBM separated a large portion of their infrastructure business into a separate company named Kyndryl. This move was performed in order to keep up with the growing competition within the managed infrastructure business that deals with hybrid cloud management services. This will allow IBM to refine their business, to grow into a firm with a focus on the software and consulting industry. Financing operations have also been winding down as the company believes that it can best deliver results with their software and consulting divisions.		[[File:Pie.png\|center\|thumb\|301x301px]]Recently, IBM separated a large portion of their infrastructure business into a separate company named Kyndryl. This move was performed in order to keep up with the growing competition within the managed infrastructure business that deals with hybrid cloud management services. This will allow IBM to refine their business, to grow into a firm with a focus on the software and consulting industry. Financing operations have also been winding down as the company believes that it can best deliver results with their software and consulting divisions.

	~~== Primary risk factors ==~~

	== References ==		== References ==
	__INDEX__		__INDEX__

>P.M. Jorgan: /* Product lines */

2023-08-11T10:00:55Z

Product lines

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	[[File:Implied premium.png\|center\|thumb\|481x481px]]		[[File:Implied premium.png\|center\|thumb\|481x481px]]
	== Looking forward ==		== Looking forward ==
			Within this next section, I cover the sensitivity analysis, peer group comparison, and product lines from a future perspective for IBM. Any and all recent updates which will effect the company in future years will be discussed here, including changes to the product line, valuation in terms of considering the company by comparing it to its peers to see if it is over or under-valued and how the forecasted share price may change with time depending on updates and revisions being made to either the capital structure (which will effect the WACC) or the growth rate (due to changes in the world economic outlook forecasts).

	== Sensitivity analysis ==		== Sensitivity analysis ==
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	The overall business line sizes are summarised below in the pie chart:		The overall business line sizes are summarised below in the pie chart:
	[[File:Pie.png\|center\|thumb\|301x301px]]		[[File:Pie.png\|center\|thumb\|301x301px]]Recently, IBM separated a large portion of their infrastructure business into a separate company named Kyndryl. This move was performed in order to keep up with the growing competition within the managed infrastructure business that deals with hybrid cloud management services. This will allow IBM to refine their business, to grow into a firm with a focus on the software and consulting industry. Financing operations have also been winding down as the company believes that it can best deliver results with their software and consulting divisions.

	== Primary risk factors ==		== Primary risk factors ==

>P.M. Jorgan: /* Product lines */

2023-08-11T09:45:34Z

Product lines

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	== Product lines ==		== Product lines ==
			As of 2023, IBM operates within 3 inter-related industries and a fourth which is less related to the rest of the business. The primary business lines are:

			* Software
			* Consulting
			* Infrastructure

			Additionally, IBM also contains a Financing division, which makes up only 1% of its revenues.

			The overall business line sizes are summarised below in the pie chart:
			[[File:Pie.png\|center\|thumb\|301x301px]]

	== Primary risk factors ==		== Primary risk factors ==

>P.M. Jorgan: /* Sensitivity analysis */

2023-08-11T09:37:03Z

Sensitivity analysis

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	== Sensitivity analysis ==		== Sensitivity analysis ==
			The purpose of a sensitivity analysis is to provide the reader with more depth of knowledge of the valuation process. In a situation in which the reader agree with the general principles and methodologies of valuation utilised by the analyst, but disagrees with some of the calculated or estimated numbers due to the assumptions used to arrive at said numbers, the sensitivity analysis provides further scenarios that can be considered by the reader of the valuation.

			Firstly, the implied premium has been sensitised. It should be noted that even tiny changes to the WACC or growth rate can lead to large changes in the future share price.
			[[File:Sensitivity1 .png\|center\|thumb\|665x665px]]
			Next, the enterprise value has been sensitised. It should be noted that these values are still in millions of dollars.
			[[File:Sens2.png\|center\|thumb\|666x666px]]
			With the inclusion of this sensitivity analysis, the reader can get a better understanding of the large scale changes that can occur at different estimations of both the growth rate and the WACC. It also allows the reader to keep either one of the variables constant, while changing the other, incase they agree with the justifications for one variable but not the other.

	== Peer group comparison ==		== Peer group comparison ==

>P.M. Jorgan: /* Peer group comparison */

2023-08-11T09:14:13Z

Peer group comparison

← Older revision		Revision as of 10:14, 11 August 2023
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	== Peer group comparison ==		== Peer group comparison ==
			IBM has a large variety of potential competitors due to their diverse range of services offered. A list of similar companies can be seen below.

			Taking the Price to Earnings ratio and Enterprise value to EBITDA multiple for IBM, and comparing it with the mean of IBM's identified peer companies, it can be seen that IBM is undervalued when considering the PE ratio, but overvalued when looking at the EV/EBITDA multiple.
			[[File:Peer group.png\|center\|thumb\|420x420px]]

	== Product lines ==		== Product lines ==

>P.M. Jorgan: /* Growth rate in perpetuity and implied premium */

2023-07-28T13:39:11Z

Growth rate in perpetuity and implied premium

← Older revision		Revision as of 14:39, 28 July 2023
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	[[File:World GDP growth forecast.png\|center\|thumb\|826x826px]]		[[File:World GDP growth forecast.png\|center\|thumb\|826x826px]]
	Using this data, the terminal value (TV) has been calculated. By discounting the TV and adding it to the PV of FCF, the enterprise value is calculated. Several adjustments are then made to obtain the equity value (such as taking away net debt and adding minority interests). This is then divided by current shares outstanding to obtain the implied share price of '''$204.27''' to be reached by '''31/12/2023''', resulting an implied premium of '''52.69%'''. The above mentioned data and the WACC & growth rates used to obtain this data is presented below.		Using this data, the terminal value (TV) has been calculated. By discounting the TV and adding it to the PV of FCF, the enterprise value is calculated. Several adjustments are then made to obtain the equity value (such as taking away net debt and adding minority interests). This is then divided by current shares outstanding to obtain the implied share price of '''$204.27''' to be reached by '''31/12/2023''', resulting an implied premium of '''52.69%'''. The above mentioned data and the WACC & growth rates used to obtain this data is presented below.
	[[File:~~Final calculation of implied~~ premium.png\|center\|thumb\|~~441x441px~~]]		[[File:Implied premium.png\|center\|thumb\|481x481px]]

	== Looking forward ==		== Looking forward ==