Here’s what Wall Street is saying about IBM ahead of earnings

IBM (IBM) is scheduled to report results of its fiscal first quarter after the market close on April 24, with a conference call scheduled for 5:00 pm ET. What to watch for:

GUIDANCE: Along with its last report, IBM guided for fiscal 2024 constant currency revenue growth in the mid-single digits. At the time, analysts were expecting the company to report FY24 revenue of $64.64B, but that figure has since fallen to $63.59B. Wall Street currently sees IBM reporting Q1 earnings per share of $1.60 on revenue of $14.55B.

JEFFERIES CUTS PT: Earlier this week, Jefferies lowered the firm’s price target on IBM to $210 from $215 and maintained a Hold rating on the shares. IBM remains a “show me story” as the company looks to reposition itself around a software-led strategy, the analyst tells investors in a research note. The firm likes the company’s initiatives to bolster its software growth and profitability profile, but thinks better execution on the new go-to-market strategy and further investments in the organic engine are necessary to drive long-term software growth higher. Until signs of a re-energized software business are seen, IBM’s risk/reward “seems balanced,” Jefferies contends.

Additionally, UBS on Monday raised the firm’s price target on IBM to $130 from $125 and kept a Sell rating on the shares. The firm updated its model, noting that a gain on the sale of Weather Channel assets lifts its Q1 EPS, but it lowered its view on the rest of the year.

EVERCORE ‘TACTICAL OUTPERFORM’: Meanwhile, Evercore ISI earlier this month added IBM to the firm’s “Tactical Outperform” list ahead of the company’s March-end quarter results announcement, as it expects the company to report revenue and EPS that are in-line to showing moderate upside compared to consensus estimates. Though there have been concerns surrounding the potential for weakness in Consulting given softness at Accenture (ACN), Evercore thinks recent macro and IT spending data points have been improving and Consulting momentum should continue, says the firm, which has an Outperform rating and $215 price target on IBM shares.

HASHICORP: On Tuesday, The Wall Street Journal’s Lauren Thomas and Laura Cooper reported that IBM is nearing an acquisition of HashiCorp (HCP), with a deal potentially coming together in the coming days. A deal for HashiCorp would likely command a premium above where the stock is currently trading, the Journal said.