Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating on International Business Machines (IBM – Research Report) yesterday and set a price target of $270.00.
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Wamsi Mohan has given his Buy rating due to a combination of factors that signal sustainable revenue and margin growth for IBM. The company’s recent Investor Day highlighted its strategic transformation under CEO Arvind Krishna, focusing on a portfolio shift towards higher growth areas such as software and consulting. IBM has targeted a topline growth of over 5%, driven by software which now constitutes a significant portion of its portfolio, with expectations of approximately 10% compound annual growth rate in this segment.
Another factor influencing the Buy rating is IBM’s consistent improvements in profit and free cash flow, underpinned by productivity enhancements and scale leverage. The company has also divested low-growth assets and invested in mergers and acquisitions to bolster both total and organic growth. Additionally, the focus on strategic areas like quantum computing and AI-driven consulting services is expected to offer further growth potential, while the operating profit margin is projected to expand annually, enhancing overall financial performance.
In another report released on February 3, Evercore ISI also maintained a Buy rating on the stock with a $275.00 price target.
Based on the recent corporate insider activity of 33 insiders, corporate insider sentiment is neutral on the stock.