Technology major International Business Machines Corporation (IBM) recently announced that the company has acquired the Adobe Workfront consulting unit and assets of Rego Consulting Corporation. The financial terms of the deal have not been disclosed so far.
Following the news, shares of the company declined marginally on Tuesday. The stock, however, recovered slightly to close at $142 in extended trade.
With this acquisition, IBM’s hybrid cloud and AI strategy is likely to receive a shot in the arm. Further, the buyout is expected to meet the rising client demand for such offerings and improve efficiency for enterprises.
Notably, post the buyout, the Adobe Workfront business of Rego will join IBM iX, the customer and experience transformation group of IBM Consulting.
The Senior Vice-President of IBM Consulting, Mark Foster, said, “The ongoing investments IBM is making in consulting services with acquisitions like this one cement IBM as the partner of choice that clients turn to for their digital business transformation.” (See IBM stock chart on TipRanks)
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On October 19, Evercore ISI analyst Amit Daryanani upgraded the stock to Hold from Sell with a price target of $18, which implies downside potential of 87.3% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 4 Buys and 6 Holds. The average IBM price target of $158.20 implies that the stock has upside potential of 11.1% from current levels.
IBM scores a 7 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained 21% over the past year.
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