IBM initiated with a Neutral at JPMorgan

JPMorgan initiated coverage of IBM with a Neutral rating and $145 price target, implying 8% upside. Following the recent spinoff of the company’s managed infrastructure services business, IBM is “cleaner and easier to follow,” with over 70% of the business now attributable to the higher-growth Software and Consulting businesses well positioned to benefit from attractive secular tailwinds, the analyst tells investors in a research note. However, the firm thinks the setup for the stock could be challenging as investors continue to weigh risk to numbers from potential macroeconomic and mainframe cycle headwinds. As such, it sees a balanced risk/reward at current share levels.