IBM is set to announce its first-quarter earnings, with expectations running high for impressive results driven by a strong influence of artificial intelligence (AI). The tech giant’s stock has surged over 45% in the past year and is up 11.75% year-to-date, propelled by rapid product deployment, a focused approach to AI, and robust cash flows.
Analysts at BofA Securities are optimistic about IBM’s trajectory, maintaining a Buy rating with a price target of $220, indicating a potential 20.9% upside from the current price of $181.90. They highlight IBM’s defensive investment appeal, emphasizing its exposure to recurring sales, cost-cutting strategies, and solid balance sheet.
The analysts foresee IBM gaining market share and maintaining stable margins, particularly in the AI and software domains. They believe that IBM’s cloud and AI initiatives will position the company for success in IT spending in the long term.
With a keen eye on enterprise AI adoption, BofA Securities sees significant growth potential for IBM in this area, especially through its GenAI business segment. They anticipate updates on enterprise AI proof of concepts and pipeline insights in the upcoming earnings report.
Looking ahead, strong free cash flow of around $12 billion in 2024 is expected, driven by increased profitability and strategic adjustments in cash requirements. The analysts also anticipate continued turnaround for IBM, fueled by revenue growth and enhanced free cash flow generation.
In conclusion, analysts remain bullish on IBM’s performance, citing its strong focus on AI, cloud, and software growth as key drivers of success in the market. Investors eagerly await the upcoming earnings report to gauge the company’s progress and potential for future growth.
