Analyst Erik Woodring from Morgan Stanley maintained a Hold rating on International Business Machines and increased the price target to $253.00 from $233.00.
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Erik Woodring has given his Hold rating due to a combination of factors that reflect both bullish and bearish perspectives on IBM’s stock. On the bullish side, IBM has shown consistent execution, and there is potential for growth driven by the HCP acquisition and the z17 mainframe cycle. Additionally, the company’s involvement in AI and quantum computing presents future opportunities that could be monetized.
However, Woodring also notes several concerns that align with a bearish outlook. IBM’s current valuation is at a premium compared to its historical levels and peers, and there are limited catalysts for significant upside. The expectations for multi-year growth are high, and the stock’s risk-reward profile appears negatively skewed. Despite potential upside in free cash flow, the market seems to have already priced in these factors, leading to a cautious stance ahead of the upcoming earnings report.