BMO Capital Sees Steady Upside For IBM

• BMO Capital updates IBM (NYSE:IBM) rating to "Market Perform" with a neutral outlook.
• IBM's earnings per share (EPS) expected to decrease to $1.43 from $1.68.
• Projected quarterly revenue slightly down at $14.39 billion from $14.46 billion.

International Business Machines Corporation, known as IBM, is a major player in the technology industry, listed on the New York Stock Exchange under the symbol IBM. The company is renowned for its hardware, software, and services, with a focus on innovation and technology solutions. IBM faces competition from other tech giants like Microsoft and Oracle.

On April 23, 2025, BMO Capital updated its rating for IBM (NYSE:IBM) to "Market Perform," maintaining a "hold" action. At this time, IBM's stock price was approximately $247.65. This rating suggests that BMO Capital expects IBM's stock to perform in line with the market, indicating a neutral stance on the company's future performance.

IBM is set to release its first-quarter earnings results after the closing bell on April 22. Analysts expect earnings of $1.43 per share, a decrease from $1.68 per share in the same period last year. This decline in earnings per share (EPS) may have influenced BMO Capital's decision to maintain a "hold" rating, as it reflects a potential challenge in IBM's profitability.

The company's projected quarterly revenue is $14.39 billion, slightly down from $14.46 billion a year earlier. This minor decrease in revenue suggests that IBM is facing some headwinds in maintaining its sales growth. Despite this, IBM's recent launch of the IBM z17 mainframe, which integrates advanced artificial intelligence features, demonstrates the company's commitment to innovation and enhancing business operations.

Ahead of the earnings release, IBM shares experienced a 2% increase, closing at $240.90 on Tuesday. This rise in stock price indicates investor optimism about the company's future prospects, possibly driven by the anticipation of the new mainframe's impact on IBM's business. However, the upcoming earnings report will provide more clarity on IBM's financial health and future direction.

• Goldman Sachs reaffirms its "Buy" rating for IBM (NYSE:IBM), setting a price target of $275 amidst the company's promising growth prospects.
• IBM's strategy aims for over 5% total revenue growth from 2025 to 2027, with a focus on software revenue growth targeting a 10% growth rate.
• The company's financial strength is highlighted by a market capitalization of approximately $243.6 billion and a trading volume of 4,083,716 shares.

On February 5, 2025, Goldman Sachs maintained its "Buy" rating for IBM (NYSE:IBM), with the stock trading at around $263.45. IBM, a major player in the Technology, Media, and Telecom (TMT) sector, is known for its software and hardware solutions. Despite a slight decrease of 0.38% in its stock price, Goldman Sachs believes IBM's potential is underappreciated.

Goldman Sachs analyst James Schneider remains optimistic about IBM, especially after the company's Investor Day on February 4. He has set a price target of $275, indicating confidence in IBM's growth prospects. Schneider highlights IBM's strategy to achieve over 5% total revenue growth from 2025 to 2027, including mergers and acquisitions, which could drive the stock higher.

IBM's focus on software revenue growth is a key factor in Schneider's positive outlook. The company aims for a 10% growth rate, surpassing previous expectations. Red Hat, a subsidiary of IBM, is experiencing mid-teens growth, contributing to the overall software segment's success. This growth is driven by increasing demand for technologies like containerization, OpenShift, and Ansible.

IBM's financial metrics further support its potential. The company has a market capitalization of approximately $243.6 billion, reflecting its significant presence in the industry. With a trading volume of 4,083,716 shares, investor interest remains strong. IBM's stock has seen a high of $265.72 today, marking its highest price over the past year, while the lowest price in the past year was $162.62.

Goldman Sachs' decision to maintain a "Buy" rating suggests confidence in IBM's long-term value, particularly for investors seeking growth in the TMT sector. The company's strategy to sustain accelerated software revenue growth and improve margins aligns with Schneider's positive assessment, indicating potential upside for IBM's stock.

International Business Machines (NYSE:IBM) shares surged more than 13% intra-day today after the tech giant delivered fourth-quarter earnings that beat analyst expectations, fueled by strong software revenue growth and an upbeat outlook for 2025.

For the quarter, IBM reported revenue of $17.6 billion, edging just below Wall Street’s projection of $17.62 billion but reflecting a 1% increase from the prior year. The software segment was the primary driver, posting a 10% revenue gain, while the consulting division saw a slight decline of about 2% to $5.2 billion. Despite the dip in consulting revenue, demand for long-term AI integration projects remains robust, with benefits expected to materialize in future quarters.

IBM’s adjusted earnings per share came in at $3.92, exceeding analyst expectations of $3.80. Meanwhile, free cash flow for the quarter reached $6.16 billion, a key metric that outperformed forecasts and reinforced investor confidence in the company's financial health.

Looking ahead, IBM provided an optimistic forecast for 2025, expecting revenue growth of at least 5% in constant currency, a notable acceleration from the 3% growth recorded in 2024. The company also projected free cash flow of approximately $13.5 billion, signaling continued momentum in its AI and cloud initiatives.

• Wamsi Mohan from Bank of America Securities sets a price target of $250 for IBM (NYSE:IBM), indicating a potential upside of about 14.87%.
• Despite an optimistic outlook, IBM's stock faces a decline, with early trading showing a decrease of 6.217% or $14.47.
• Analysts have mixed views on IBM, with price targets ranging from $208 to $260, reflecting the uncertainty surrounding the company's performance.

On October 24, 2024, Wamsi Mohan from Bank of America Securities set a price target of $250 for IBM (NYSE:IBM). At the time, IBM's stock was priced at $217.63, suggesting a potential upside of about 14.87%. IBM, a major player in the technology sector, competes with companies like Microsoft and Oracle. It offers a range of services, including cloud computing and artificial intelligence.

Despite the optimistic price target from Bank of America Securities, IBM's shares faced a decline in early trading following disappointing third-quarter revenues. The stock is currently priced at $218.28, reflecting a decrease of 6.217% or $14.47. During the day, IBM's stock fluctuated between $216.16 and $221.10, indicating market volatility.

Analysts have mixed views on IBM's future. Morgan Stanley's Erik Woodring maintained an Equal-Weight rating but lowered the price target from $217 to $208. In contrast, BMO Capital Markets' Keith Bachman increased the price target from $235 to $260, maintaining a Market Perform rating. This divergence in opinions highlights the uncertainty surrounding IBM's performance.

Both Wamsi Mohan from Bank of America Securities and James Schneider from Goldman Sachs upheld a Buy rating with a $250 price target. Similarly, RBC Capital Markets' Matthew Swanson maintained an Outperform rating with the same target. These analysts express confidence in IBM's potential, despite recent setbacks.

Piper Sandler's James Fish pointed out a pause in discretionary spending as a significant takeaway from IBM's results. This could impact IBM's growth, as discretionary spending often influences technology investments. IBM's market capitalization is approximately $201.07 billion, with a trading volume of 9.83 million shares, reflecting its significant presence in the market.

International Business Machines (NYSE:IBM) reported third-quarter earnings that surpassed analyst expectations, but a slight revenue miss sent its shares down more than 6% intra-day today.

The tech giant posted adjusted earnings per share of $2.30, beating the Street estimate of $2.22. However, revenue reached $15 billion, just shy of the anticipated $15.04 billion. This represented a modest 1% increase year-over-year, or 2% when adjusted for constant currency.

IBM's Software segment was a standout performer, with revenue rising 9.7% to $6.5 billion, driven by a strong 14% growth in its Red Hat business. In contrast, the Infrastructure segment struggled, with revenue declining 7% to $3 billion.

Despite the revenue shortfall, IBM reaffirmed its full-year 2024 outlook, projecting constant currency revenue growth in line with its mid-single-digit model. The company also boosted its free cash flow guidance, expecting it to exceed $12 billion for the year.

• Jefferies has raised the price target for IBM (NYSE:IBM) from $200 to $245, maintaining a "Hold" rating.
• IBM's Granite 3.0 models, designed for business applications, are now available for commercial use, enhancing IBM's AI offerings.
• The Granite Time Series model, part of the Granite 3.0 lineup, excels in zero and few-shot forecasting, outperforming larger models.

On October 21, 2024, Jefferies maintained its "Hold" rating for IBM (NYSE:IBM), while raising the price target from $200 to $245, as highlighted by TheFly. At the time, IBM's stock was priced at $232.20. This decision comes amid IBM's strategic advancements in artificial intelligence, particularly with the release of its Granite 3.0 models.

IBM's Granite 3.0 models are designed for business applications and are open-source, unlike competitors such as Microsoft, which charge for access. IBM offers a paid service called Watsonx to help businesses run these models in data centers. Some Granite models are now available for commercial use on the Watsonx platform, enhancing IBM's AI offerings.

The Granite models, developed using Nvidia's H100 graphics processor units, are accessible through Nvidia's software tools. This allows businesses to integrate AI models more effectively. IBM's director of research, Dario Gil, emphasizes the models' performance, often surpassing or matching similarly sized models in academic and enterprise benchmarks.

A notable feature of the Granite 3.0 lineup is the Granite Time Series model, which excels in zero and few-shot forecasting. It outperforms models ten times larger, showcasing IBM's innovation in AI. Additionally, Granite will be the default model for Consulting Advantage, IBM's AI-powered delivery platform, used by 160,000 consultants.

IBM's stock, currently priced at $232.20, has seen a slight decrease of 0.29%, with a change of $0.68. The stock's trading range today is between $230.17 and $232.65. Over the past year, IBM's stock has reached a high of $237.37 and a low of $135.87, with a market capitalization of approximately $213.89 billion and a trading volume of 2,838,912 shares.

• Evercore ISI has upgraded IBM (NYSE:IBM) to Outperform, raising the price target from $215 to $240, indicating strong growth potential.
• IBM's focus on innovation in areas like artificial intelligence, cloud computing, and quantum computing is key to its competitive edge and market relevance.
• The stock's recent performance and market capitalization reflect investor confidence in IBM's strategic direction and financial health.

Evercore ISI's recent upgrade of IBM (NYSE:IBM) to Outperform, as reported by TheFly, signals a strong confidence in the company's future prospects. This upgrade, coupled with a raised price target from $215 to $240, suggests that analysts see significant growth potential in IBM. The company, known for its robust presence in the technology sector, has been making strategic moves to stay ahead in a competitive landscape, where innovation and adaptability are key.

IBM's ability to evolve and meet market challenges is a critical factor in its sustained relevance, as highlighted by The Motley Fool. This adaptability is not just about keeping pace but setting trends in the tech industry. IBM's focus on areas like artificial intelligence, cloud computing, and quantum computing positions it well against competitors and aligns with the reasons for Evercore ISI's optimistic outlook.

The stock's recent performance, with a slight increase to $205.625, reflects investor confidence following the upgrade. This price movement, within the context of a trading range between $203.04 and $207.76, underscores the market's positive reception to IBM's strategic directions and financial health. The company's market capitalization of approximately $189.41 billion, supported by a trading volume of 1,819,940 shares, further demonstrates its significant footprint in the tech sector.

IBM's comparison with Amazon, as noted by The Motley Fool, in terms of innovation and market strategy, highlights the company's strength in identifying and capitalizing on business opportunities. This ability to innovate and adapt is crucial for IBM's goal to sustain its market position and drive future growth, aligning with Evercore ISI's bullish stance on the stock.

Overall, the upgraded rating and price target by Evercore ISI, along with IBM's recognition for its adaptability and innovation, paint a promising picture for the company's future. This optimism is reflected in the stock's market performance and is a testament to IBM's enduring strength and strategic vision in the rapidly evolving tech landscape.