Cantor Fitzgerald Research initiated coverage on International Business Machines Corp. (NYSE:IBM) yesterday with a Buy rating. Brian White, the analyst who authored the report, said that the firm seems to have an attractive valuation compared to comparable firms on the S&P 500 (INDEXSP:.INX). Shares in the company were up a fraction on today’s market.

International Business Machines

White put a price target of $220 per share on International Business Machines Corp. (NYSE:IBM) stock. That number would be an all-time high for IBM, which has been traded publicly for more than 30 years. White said that the company’s earnings expansion and the increased reliability of its numbers were the major reasons for his feelings on the company.

International Business Machine’s valuation

For a company so heavily weighted in the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA), International Business Machines Corp. (NYSE:IBM) has underperformed in the last year. The company’s underperformance is one of the factors blamed for the recent shape up in the index.

So far in 2013, International Business Machines Corp. (NYSE:IBM) shares have gained just 1 percent. The S&P 500 (INDEXSP:.INX) and the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) have gained 19 percent and 20 percent respectively. Mr. White of Cantor Fitzgerald values IBM at 12 times its expected 2014 earnings. At the moment, the company is trading at a close to 14 times its 2013 earnings, and around 10.4 times 2014 expected numbers.

White reckons that IBM should be valued at closer to the level of the wider S&P 500 (INDEXSP:.INX). The companies on that index are trading at around 14 times expected 2014 earnings. With IBM increasing its own forecasts, and the strong record of earnings expansion the company has demonstrated, White reckons it’s about time somebody paid attention to the IT giant.

International Business Machines earnings

International Business Machines Corp. (NYSE:IBM) was boring by the time the tech bubble came around in the late twentieth century, and by the time the boom in consumer electronics happened a few years later the company had stopped selling anything to consumers.

International Business Machines Corp. (NYSE:IBM) is now, for the most part, an enterprise software and services group. The company sells its expertise and systems to other businesses. This, according to the Cantor Fitzgerald report, has spurred stability in earnings and has helped the firm grow.

International Business Machines Corp. (NYSE:IBM) has managed to expand its earnings per share by 16 percent every year over the last five years, and the company does not look like it’s slowing down. Brian White thinks that kind of growth is worth a Buy rating and a Price target of $220.