Morningstar INC is a publicly traded investment research firm based in Chicago. The A+ credit rating means that International Business Machines Corp is very unlikely to default (low default risk.) IBM’s stock was also given a 3 star credit rating by Morningstar. Adobe Systems INC is another firm that has been awarded the A+ credit rating by Morningstar INC.
Firms tend to see an increase in their share price (this increase can be very significant/exponential) when their credit rating is increased. If a stock is less likely to default, it is seen as a more secure and therefore more attractive investment proposition for investors. The improved credit rating tends to lead to more demand for the shares of a particular firm (International Business Machines Corp in this case), driving their share price up. International Business Machines Corp ‘s share price is up by less than 1% today, trading at just over $119 per share. Their improved credit rating (by Morningstar INC) has perhaps not increased IBM’s share price by as much as you would expect (as there are several other factors which affect the value of a particular stock.)
International Business Machines Corp (IBM) revealed their 3 month (quarterly) earnings on the 19th of January, reporting a earnings per share (EPS) of $4.84, yielding a higher share than some experts had speculated. IBM recently announced that they will be paying their shareholders a quarterly dividend on the 10th of this March.
IBM is one of the most significant firms in the tech industry, as they are responsible for the invention of a number of devices that have been used on a large scale e.g. the automated teller machine (ATM) and the floppy disk. IBM is highly significant due to its size, with nearly 450,000 employees worldwide (they are the second largest US firm based on this.) In terms of financial performance in 2015, International Business Machines Corp (IBM) generated a revenue in excess of $80 billion and a net income of around $13 billion. In August 2015, International Business Machines Corp (IBM) announced that they will be acquiring Merge Healthcare INC for around $1 billion.
Ex-IBM software chief Steven Mills sold 10,000 shares of IBM’s stock on November the 23rd. The total value of the sale is around $1.4 million. IBM’s share price is near an all time low (their stock was trading at more than $200 per share in 2013.) Their improved credit rating should generally make their stock more attractive for investors, and the A+ credit rating could benefit the firm significantly, or it could prove to be insufficient to lead to an increase in demand for their stock.