In a report released yesterday, David Grossman from Stifel Nicolaus maintained a Buy rating on International Business Machines (IBM – Research Report), with a price target of $290.00.
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David Grossman has given his Buy rating due to a combination of factors impacting IBM’s growth and financial outlook. The company’s management has presented a new financial roadmap focusing on moderate revenue growth, a projected annual expansion of operating margin, and free cash flow growth exceeding revenue growth. Grossman sees multiple avenues for IBM to achieve its revenue growth targets, particularly through accelerated software growth, which is expected to surpass other segments in the portfolio.
Moreover, IBM’s current trading position at a fair valuation combined with its dividend yield suggests potential price appreciation. The improving free cash flow generation enhances IBM’s ability to invest in growth, potentially leading to an incremental re-rating over time. Additionally, strategic investments in R&D and product releases are expected to drive growth in specific subsegments, reinforcing the overall positive outlook for the company.
Grossman covers the Technology sector, focusing on stocks such as International Business Machines, Accenture, and Epam Systems. According to TipRanks, Grossman has an average return of 8.8% and a 60.92% success rate on recommended stocks.
In another report released yesterday, RBC Capital also maintained a Buy rating on the stock with a $276.00 price target.