Using the PEG framework with analyst consensus forward EPS growth of 8.0% plus 2.7% dividend yield, International Business Machines Corporation has a fair value of $99.15 based on NTM EPS (FY2026) of $12.39. The current PEG ratio is 3.13.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 3.5% |
| Dividend Yield | +2.7% |
| Adjusted Growth (clamped 8–25%)Clamped | 8.0% |
| Fair P/E | 8.0x |
| NTM EPS (FY2026) | $12.39 |
| Fair Value | $99.15 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $11.17 | — | — |
| FY2026E | $12.39 | +11.0% | 13 |
| FY2027E | $13.37 | +7.9% | 14 |
| FY2028E | $14.65 | +9.6% | 9 |
| FY2029E | $14.20 | -3.1% | 4 |
| FY2030E | $13.27 | -6.5% | 4 |
5Y Forward EPS CAGR: 3.5%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.
| Year | Net Income | EPS | YoY |
|---|
| FY2021 | $5.7B | $6.35 | — |
| FY2022 | $1.6B | $1.80 | -71.7% |
| FY2023 | $7.5B | $8.14 | +352.2% |
| FY2024 | $6.0B | $6.43 | -21.0% |
| FY2025 | $10.6B | $11.17 | +73.7% |
4Y Historical EPS CAGR: 15.2%