(IBM) stock has risen 3.21% over the past week, 1.14% in the last month, and an impressive 47.31% over the past 12 months. Wall Street’s analysts are moderately bullish, with a 12‑month consensus rating of “ModerateBuy” and an average price target of $315.80, only slightly above the last closing price of $312.18. That suggests expectations for more measured gains ahead after a very strong run in 2025.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Analyst Wamsi Mohan of Bank of America is among those still positive on International Business Machines, reiterating a Buy rating on January 13, 2026, and raising his price target to $335.00. From the current price, that target implies only modest upside, reflecting his view that 2026 will be a more balanced year after IBM’s 38% stock gain in 2025, compared with an 18% rise in the S&P 500. His stance fits well with the overall “ModerateBuy” consensus: supportive of the stock, but with tempered expectations.
Mohan’s latest report points to a “tougher setup” heading into 2026, mainly because of a softer finish to 2025 and several headwinds in the coming year. He expects International Business Machines to report a weaker pretax income (PTI) margin in the fourth quarter, largely due to workforce rebalancing costs of about $400 million. That pressure means he now sees full‑year 2025 PTI margin expansion landing below management’s guidance of more than 100 basis points, at around 70 basis points instead. Lower tax expenses are expected to provide only a partial offset to earnings per share.
Looking ahead, Mohan forecasts that in 2026, software revenue will grow around 10% in constant currency, with low single‑digit growth in consulting and flat trends in infrastructure, for a total company growth rate of roughly 5% in constant currency (about 4% organically). The planned acquisition of Confluent (CFLT), expected to close mid‑year, should add about 2% inorganic growth to software, boosting data‑related revenues in particular. He models free cash flow of $14.0 billion for 2025 and a 2026 guide of about $15 billion, maintaining a healthy 130% net income to free cash flow ratio, and highlights higher‑margin software, strong cash generation, and quantum computing (QC) optionality as key reasons to stay constructive.
Behind his $335 price target, Mohan is adjusting his 2025 estimates to $67.1 billion in revenue and $11.32 in EPS, and rolling his valuation forward to 2027 free cash flow, using a 23x EV/FCF multiple after factoring in the Confluent deal. While he is cautious on the near term due to workforce restructuring, deceleration in some software segments, and normalization in infrastructure growth, he still sees International Business Machines as a Buy. Investors may take comfort in his track record: 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.