Technology giant IBM (IBM) recently announced that it has agreed to acquire Madrid-based data solutions services provider Bluetab. The financial terms of the deal, which is likely to close in the third quarter of 2021, have been kept under wraps.
Following the news, shares of the company gained marginally in Thursday’s trading session. However, it pared its gains slightly to close at $140.40 in the extended trading session.
With data analytics gaining significance daily, this buyout is expected to strengthen IBM’s foothold in the data management space and further enhance its offerings.
The Senior Vice-President of IBM Services and Global Business Services, Mark Foster, said, “Our acquisition of Bluetab will fuel migration to the cloud and help our clients to realize even more value from their mission-critical data.” (See IBM stock chart on TipRanks)
Recently, Morgan Stanley analyst Kathryn Huberty reiterated a Hold rating on the stock with a price target of $152. The analyst’s price target implies upside potential of 8.2% from current levels.
According to the analyst, the company’s recent email outage can be a cause of concern. She noted, “This could lead to some revenue recognition being pushed out, as IBM reportedly requires contract e-signatures before midnight on the last day of the quarter to book a deal as revenue in the quarter. In addition to any impact in the June quarter, the outage raises some reputational risk for IBM Services which manages thousands of customer migrations similar to this one each year.”
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus based on 4 Buys, 3 Holds and 1 Sell. The average IBM price target of $151.75 implies the stock has upside potential of 8.1% from current levels.
IBM scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 13.3% over the past year.