Goldman Sachs analyst James Schneider maintained a Buy rating on International Business Machines on July 23 and set a price target of $320.00.
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James Schneider has given his Buy rating due to a combination of factors that suggest a positive outlook for IBM’s stock. Despite an initial negative market reaction, Schneider expects the stock to recover as the company’s software outlook remains stable, and there is increased guidance for margins and free cash flow. Although software performance was slightly weaker due to a temporary decline in Transaction Processing, key areas like Red Hat maintained growth, and there is potential for overall software growth to improve by 2026.
Moreover, IBM’s core margin performance is noteworthy, allowing the company to raise its margin guidance even amidst M&A dilution. Schneider believes IBM is successfully transitioning towards long-term growth, driven by stronger software growth and market share gains in Consulting. As the software mix improves and margins increase, Schneider anticipates the stock could be re-rated higher, reinforcing his Buy recommendation.
In another report released yesterday, RBC Capital also maintained a Buy rating on the stock with a $315.00 price target.
IBM’s price has also changed moderately for the past six months – from $226.040 to $282.010, which is a 24.76% increase.