Looking at what JPMorgan recently had to say about International Business Machines (NYSE:IBM), it’s a wonder investors didn’t turn and run for the door as quickly as they could. However, that turned out to be just the opposite; investors bought in, though not in great amounts, despite an outlook from JPMorgan that could best be described as “mixed.”
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There was some good news out of JPMorgan via analyst Brian Essex. IBM is continuing its process of transformation away from its pure-hardware play of yesteryear and into software, up to and including the latest in artificial intelligence. Essex notes IBM is “cleaner and easier to follow.” It’s improving its focus, and it just spun off managed infrastructure services operations, starting an entire company around them known as Kyndryl (NYSE:KD). However, IBM is also likely to suffer from “headwinds” going forward from issues in mainframe and consulting operations.
By way of improving its focus, IBM is shutting down its “Cloud for Education” program. IBM noted that the service in its current form was “…deprecated and will be withdrawn from service and support.” IBM also noted that clients should move their workloads before November 30, when support is withdrawn altogether. What it’s being replaced with is as of yet unclear, but IBM is working with current customers. Further, IBM is putting AI to work with this year’s Wimbledon match, as IBM will provide the AI Draw Analysis, which offers draw rankings for singles players in the competition.
What is the forecast for IBM stock?
IBM’s future doesn’t quite look so clear to other analysts. Right now, the consensus is largely split, with four Buys and six Holds coming together to make IBM stock a Moderate Buy. Further, IBM stock offers investors 9.49% upside potential thanks to its average price target of $146.40.
