Fundamentals · IBM
DuPont (ROE Decomposition) for IBM
AI-generated plain-English read of dupont (roe decomposition) for IBM. Updated daily.
Leverage-driven ROE, stable
highROE looks steady (6.3%), but 4.40× leverage is doing most of the work. Margins and asset efficiency aren't moving. This is financial engineering, not compounding quality.
What will probably happen
- ROE is stable: no obvious catalyst for a sharp move in either direction from the DuPont picture alone.
- Elevated leverage (4.40×) is amplifying ROE in both directions. If margins slip, ROE will fall faster than the income statement suggests.
What to do
- If you HOLD this stock
- Leverage (4.40×) is doing the heavy lifting. Hold only if you're comfortable that the debt load is sustainable in a slower earnings environment. Watch interest coverage and free cash flow.
- If you are EVALUATING this stock
- Don't let the headline ROE (6.3%) mislead you: it's primarily a function of 4.40× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- No sharp DuPont signal either way. Premium is fairly priced for a fundamentals-stable story. Wait for a clearer inflection in one of the legs before positioning directionally.
34 periods with all three DuPont legs populated: trend reads are reliable.
Technical details
Technical analysis
- Profitability (net margin)
- 12.6%, improving, healthy
- Asset efficiency (turnover)
- 0.11×, stable, healthy
- Leverage (equity multiplier)
- 4.40×, deteriorating, healthy [elevated]
- ROE
- 6.3%, stable
- Primary ROE driver
- Leverage Driven
- Periods analysed
- 34
- Sector context
- not provided
Key levels
| Level | Value |
|---|---|
| latest roe | 0.063 |
| latest margin | 0.126 |
| latest turnover | 0.113 |
| latest em | 4.403 |
| em critical threshold | 5 |
| em high threshold | 4 |