Analyst Wamsi Mohan from Bank of America Securities reiterated a Buy rating on International Business Machines and decreased the price target to $310.00 from $320.00.
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Wamsi Mohan has given his Buy rating due to a combination of factors including IBM’s strong infrastructure performance and margin growth, which have offset the slower growth in organic software. The company’s infrastructure segment has exceeded expectations, particularly with the successful launch of the z17, leading to significant year-over-year revenue and margin improvements. Additionally, the management’s confidence in the company’s overall growth, as well as the anticipated increase in high-margin software contributions, supports a positive outlook.
Despite some challenges in software revenue and consulting, Mohan remains optimistic about IBM’s future trajectory. The integration of acquired businesses and the potential for accelerated automation growth in the latter half of 2025 are expected to drive further improvements. The revised free cash flow guidance and the potential for higher estimates in 2025 and 2026 also contribute to the Buy rating, despite a slight reduction in the price objective to reflect the current software revenue deceleration.
Mohan covers the Technology sector, focusing on stocks such as Seagate Tech, Apple, and International Business Machines. According to TipRanks, Mohan has an average return of 12.6% and a 61.18% success rate on recommended stocks.
In another report released on July 22, Evercore ISI also maintained a Buy rating on the stock with a $315.00 price target.