Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating on International Business Machines yesterday and set a price target of $310.00.
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Wamsi Mohan has given his Buy rating due to a combination of factors influencing IBM’s growth trajectory. A key driver is the anticipated reacceleration in software growth, particularly in Transaction Processing (TP) and Automation, following a period of slower growth post-mainframe launch. The recent launch of the z17 mainframe has shown promising results with significant growth in MIPS shipped, suggesting a positive outlook for TP revenue growth in the upcoming quarters.
Additionally, Mohan highlights IBM’s strategic focus on higher-margin software and free cash flow (FCF) growth, expecting a slight increase in FCF guidance for fiscal 2025. The potential for a significant M&A transaction to enhance IBM’s software data portfolio, along with the anticipated growth in infrastructure revenues driven by the z17 and upcoming Spyre card launch, further supports the Buy rating. Despite a muted outlook for consulting, these factors collectively contribute to a positive long-term growth perspective for IBM.
According to TipRanks, Mohan is a 5-star analyst with an average return of 17.6% and a 63.60% success rate. Mohan covers the Technology sector, focusing on stocks such as Apple, Dell Technologies, and HP.
In another report released on October 15, RBC Capital also maintained a Buy rating on the stock with a $315.00 price target.