International Business Machines ‘(IBM)’ stock has fallen 7.3% over the past week, extending a 18.7% slide over the past month and a 4.8% decline over the last year. Wall Street’s analysts are moderately bullish, with a consensus ModerateBuy rating and an average 12‑month price target of $334.18, well above the last close of $237.54.
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New trading tool for IBM bullsAnalyst David Vogt of UBS recently upgraded IBM shares from Sell to Hold, setting a price target of $236, which is roughly in line with where the stock currently trades. Vogt argues that after IBM’s 22% drop in calendar 2026 and 27% underperformance versus the S&P 500 over 12 months, the risk–reward profile has become more balanced.
Vogt points out that IBM now trades at about 18.5x his 2026 EPS estimate of $12.43 and 17.5x his 2027 EPS estimate of $13.13, levels he views as fair given expectations for 3%–4% organic revenue growth over the next several years. He notes that the stock also offers a 7% free‑cash‑flow yield, suggesting that many of the current headwinds are already reflected in the valuation.
The UBS analyst acknowledges market concerns around artificial intelligence, including fears that AI‑driven translation of legacy COBOL could hurt IBM’s infrastructure business. However, he believes IBM’s Z mainframe platform remains well protected thanks to strong customer stickiness, data sovereignty needs, and a complex, vertically integrated stack that includes quantum‑safe encryption, supporting his view that infrastructure growth will likely remain flattish rather than collapse.
Vogt, who ranks 2968 out of 12078 analysts on TipRanks with a 60% success rate and a 7.4% average return per rating, says earlier worries about uneven execution, heavy reliance on M&A and a premium valuation justified his prior Sell call. Now, with Red Hat growth slowing, consulting demand uncertain under AI, and infrastructure fears weighing on the multiple, IBM trades at a mid‑teens discount to the market that he believes better matches its prospects. Never miss a stock rating. Find all the latest ratings on TipRanks’ Top Wall Street Analysts page.