International Business Machines (IBM) stock has fallen 0.2% over the past week and 2.6% over the past month, but it remains up a strong 32.0% over the last 12 months. Wall Street’s analysts are moderately bullish, with a “ModerateBuy” consensus and an average 12‑month price target of $321.27, suggesting room for further gains from the last closing price of $294.16.
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One of the most closely followed voices on the name, analyst Wamsi Mohan of Bank of America, reiterated his Buy rating on IBM on January 28, 2026, and raised his price objective to $340.00. That target implies meaningful upside from current levels and reflects what he sees as a better‑than‑expected profit and free cash flow outlook for the company. His stance fits within the broader ModerateBuy consensus that points to ongoing optimism about IBM’s ability to execute its strategy.
Mohan’s latest report highlights that IBM delivered another top-line beat, driven by strength in its Infrastructure segment, improving transaction processing (TP, up 4% year over year), and robust growth in Data (up 19% year over year). Despite $300 million in workforce rebalancing charges that weighed on fourth-quarter profit before tax margins, IBM still expanded PTI margins by roughly 100 basis points for the full year. Those restructuring charges were not fully reflected in consensus estimates, while a lower tax rate helped IBM post an earnings-per-share beat of about $0.20, underscoring operational resilience.
The analyst sees IBM’s ongoing shift toward higher-margin software and strong free cash flow as key drivers. While Red Hat (RHT) growth slowed to 8% year over year due to delays in the Federal business, areas like OpenShift and Ansible remained solid, and hybrid cloud is expected to grow at a double-digit pace in 2026. Data, boosted by demand for AI and strategic partnerships, is projected to grow at a high-teens rate, and Automation is expected to return to double-digit growth as well. Overall, Mohan expects IBM’s Software segment to grow about 7% organically in 2026, with an additional 3% from mergers and acquisitions, while Infrastructure faces low-single-digit declines and Consulting is set for low- to mid-single-digit growth on the back of AI-related demand.
Looking ahead, Mohan models 2026 free cash flow of $15.7 billion, in line with IBM’s guidance and above earlier market expectations closer to $15 billion, along with 2026 revenue of $71.0 billion and EPS of $12.20. His $340 price target is based on a 23x multiple of his 2027 free cash flow estimate, reflecting confidence that productivity improvements and the company’s mix shift can drive further profit expansion. This 5‑star analyst ranks 110 out of 11,984 on TipRanks, with a success rate of about 62.37% and an average return of 25.10% per rating. Never miss a stock rating. Find all the latest ratings on TipRanks’ Top Wall Street Analysts page.