In a report released today, Mark Newman from Bernstein maintained a Hold rating on International Business Machines, with a price target of $280.00.
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Mark Newman’s rating is based on IBM’s strategic acquisition of Confluent, which is expected to enhance IBM’s capabilities in the Hybrid Cloud and AI sectors. The acquisition aligns with IBM’s strategy to accelerate software-led growth and expand its presence in the real-time data streaming market. With Confluent’s technology, IBM aims to strengthen its leadership in enterprise-grade data and AI, offering a comprehensive platform for deploying and scaling AI solutions across enterprises.
Despite the positive outlook, Newman maintains a Hold rating due to the potential risks and uncertainties associated with the acquisition. While the deal is expected to be accretive to IBM’s earnings and free cash flow in the coming years, the market has already priced in a high probability of the deal closing. Additionally, the impact of the acquisition on IBM’s financial metrics, such as EPS and EBITDA, will take time to materialize, leading to a cautious approach in the short term.
In another report released today, BMO Capital also maintained a Hold rating on the stock with a $305.00 price target.