J.P. Morgan analyst Brian Essex has maintained their neutral stance on IBM stock, giving a Hold rating today.
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Brian Essex has given his Hold rating due to a combination of factors relating to IBM’s strategic focus and market positioning. The analyst notes IBM’s encouraging efforts to grow its higher-value Software business, which has shown promise with an optimistic target model that includes sustainable growth and improved free cash flow projections. However, the reliance on mergers and acquisitions (M&A) as part of IBM’s growth strategy introduces potential risks, especially given the uncertainties surrounding regulatory environments in regions like the U.K. and the European Union.
Essex acknowledges IBM’s successful execution in recent periods and its alignment towards higher-end markets, especially with the Software segment, which is anticipated to become a larger part of its revenue mix. Nevertheless, the analyst maintains a neutral stance, as the current stock valuations already factor in the positive outlook and growth potential. Thus, the risk/reward balance at present levels suggests holding rather than buying or selling the stock.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $228.00 price target.
Based on the recent corporate insider activity of 33 insiders, corporate insider sentiment is neutral on the stock.