IBM Seen as ‘Stable Compounder' — Stifel Lifts Price Target Ahead of Q2
The firm believes that IBM is a 'stable/defensive compounder' with mid-single-digit revenue growth potential and annual margin expansion. This should yield mid-to-high-single-digit earnings along with free cash flow growth.
Some factors highlighted by the firm that may act as revenue tailwinds for the stock are its z17 mainframe cycle released in mid-June and IBM's capability to leverage recent software acquisitions like Hashi and DataStax.
Adriano Castelli / Shutterstock.com
Nevertheless, Grossman noted that even though fundamentals for the stock are stable/positive, it may be difficult to forecast upward earnings revisions in the current environment. This can be risky heading into the earnings report, which is why a post-Q2 earnings report may be a better entry point.
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
While we acknowledge the potential of IBM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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