As mentioned in passing on today’s front page, analysts took a closer look at IBM Corp’s statement on its radical restructuring and by 12.40 New York time, the shares had given up all of their Tuesday gain and were off $3 even at $94.875; Merrill Lynch analyst Daniel Mandresh lowered his intermediate rating to 3 neutral, from 2, above average, although he kept his long-term rating at 1 – buy; Jay Stevens at Dean Witter Reynolds Inc downgraded his rating to buy-hold from buy, and Bear Stearns & Co analyst Clifford Friedman reduced his recommendation to buy from strong buy; Jay Stevens told Dow Jones Professional Investor Report that he cut his 1992 earnings estimate to $8 a share from $9, citing concerns about soft worldwide demand and inefficiencies that might be created during the reorganisation, while Clifford Friedman cites several near-term concerns about the restructuring, including the timing of the changes, whether the business units will have true autonomy in terms of marketing, distribution and hiring and how willing the corporate parent will be to let the units pursue their own interests given that some might cannibalise other areas of the business; he stuck to $9 a share for next year but cut his fourth-quarter 1991 estimate of operating earnings – before the $3,000m charge – to $2 a share from $2.50 to reflect his lower turnover expectations and a higher-than-anticipated tax rate.
