International Business Machines (IBM – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Wamsi Mohan from Bank of America Securities maintained a Buy rating on the stock and has a $270.00 price target.
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Wamsi Mohan has given his Buy rating due to a combination of factors that highlight IBM’s strategic positioning and growth potential. One of the primary reasons is the significant role of IBM’s Transaction Processing (TP) software, which constitutes a substantial portion of the company’s software revenue. Despite the focus on RedHat for growth, TP remains crucial for IBM’s overall growth and profitability, with expectations of mid-single-digit growth.
Additionally, Mohan points to several growth drivers for TP, including the expansion of mainframe workloads, platform innovation, and high renewal rates. The introduction of WatsonX for Z and innovative pricing strategies have enhanced the platform’s appeal, making it more attractive to customers. Furthermore, IBM’s Enterprise License Agreement (ELA) strategy has been instrumental in driving adoption and financial stability, fostering long-term commitments and facilitating revenue growth. These factors collectively contribute to a positive outlook for IBM, supporting the Buy rating.
In another report released on May 15, RBC Capital also maintained a Buy rating on the stock with a $285.00 price target.
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