Oppenheimer bullish on Kyndryl Holdings, initiates with an Outperform

As previously reported, Oppenheimer initiated coverage of Kyndryl Holdings (KD) with an Outperform rating and $33 price target. Poised to return to top-line growth, meaningfully increase margins, and generate more than $3 of EPS in FY27, Kyndryl represents an interesting investment opportunity, the firm says. No longer captive to former parent IBM (IBM), Kyndryl has been able to re-price legacy no/low margin contracts, strike deals with major hyperscalers, move its customer to its costsaving operating platform, and grow its Consult business by double digits. These tailwinds should continue for the foreseeable future, and help transform the company, which was previously viewed as a bad business or loss-leader under IBM, into an interesting GARP investment, Oppenheimer adds.