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S&P Keeps IBM at Buy after India News
southasian_birdy | June 7, 2006 at 08:11 amby
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IBM plans to triple its investment in India to $6 billion over three years. We agree that India is a key strategic area for technology firms, however, we note investments there have met varying degrees of success to date. We think one of the more potentially attractive areas of IBM's investment is its new Global Delivery Research & Development program, which creates a "virtual" services delivery network, offering scale without requiring new resources. Our 2006 earnings per share (EPS) estimate remains $5.90. We view IBM, trading at 13.4 times that estimate, as attractive relative to peers and its historical range.