IBM (NYSE: IBM) is finally getting some respect. Misunderstood and underappreciated for years, the company is starting to get credit for transforming itself over the last couple of decades into a well-oiled, cash-generation machine.

At an investor day on March 8, IBM reiterated its plan to grow EPS by a compounded annual growth rate (CAGR) of 11% or more through 2015. Oh, and the CFO mentioned IBM is ahead of plan, so there is potential for upside. Wall Street analysts practically fell over one another in their rush to raise price targets.

How'd they do that?
It probably didn't hurt that IBM reminded investors about the 2007 to 2010 plan it laid out in early 2007. Or that IBM pointed out it would nicely beat that plan ... despite an unanticipated Great Recession. EPS grew at an impressive 17% compounded annual growth rate from 2006 to 2010. There was also a nice chart highlighting IBM as the only Dow stock to have year-over-year GAAP EPS growth every single quarter since the beginning of 2003.

Management also put up charts showing the price increase and total shareholder return (which includes dividends) of IBM stock since the end of 2000. IBM stock shamed the major market averages, along with other tech rivals such as Hewlett-Packard (NYSE: HPQ), Oracle (Nasdaq: ORCL), and EMC (NYSE: EMC).

Skating to where the puck will be
By 2015, IBM expects half of its profit to come from software. It expects almost 30% of revenue to come from "growth" markets, i.e., BRIC countries and 16 other emerging markets. Between now and then, IBM expects to generate $100 billion in free cash flow and distribute $70 billion of that to shareholders. That's more than $57 of love per share.

It's no wonder competitors HP and Dell are on acquisition sprees. They want to be like IBM. Imitation is the sincerest form of flattery.

Foolish takeaway
IBM's well thought out plan through 2015 is to keep on doing what it has already done so well. It's hard to argue with success. And it is much safer to bet IBM can keep on keeping on than to bet that competitors can successfully change to become more like IBM.

More on IBM:

Fool contributor Cindy Johnson owns shares of Microsoft and should own shares of IBM. The Fool owns shares of EMC, International Business Machines, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.