BofA Global Research maintains a "Buy" rating on IBM, raising the price objective to $260 from $250, driven by expectations of a strong 2025 with 7% constant currency growth and free cash flow (FCF) of $12.6 billion. The report anticipates IBM's upcoming Investor Day to provide a bullish update on mid-term targets, with a focus on software growth, particularly from Red Hat Technologies, and the integration of recent acquisitions like HashiCorp. BofA models a 2025 EPS of $10.47, up from $10.37, and expects IBM to guide a 6-8% CAGR for software revenues from 2024 to 2027.
The report highlights potential FX headwinds and discretionary spending pressures but remains optimistic about IBM's defensive portfolio and dividend appeal. BofA notes, "We are positive on the setup into the Investor Day for IBM, where we expect a bullish update to the mid-term model." The report also anticipates growth in IBM's infrastructure segment with the launch of the Z17 mainframe cycle in mid-2025.
IBM's current stock price is $224.33, up 0.48% from the previous close.