IBM on a Growth Path: Analysts Raise Price Target

Stifel analysts have raised their price target for IBM from $205 to $246 and maintain their buy recommendation. Although the third quarter is seasonally weaker, they expect a slight earnings beat, while revenue may be less impressive. IBM is seen as a solid, defensively oriented growth strategy offering a dividend yield of 2.9%. However, the analysts point out that the stock appears somewhat overvalued ahead of the quarterly report. Post-report, IBM could present itself as more attractive in case of any weaknesses, while the setup for 2025 is exceptionally strong. IBM's strategic acquisitions pave the way for significant long-term gains. The possible completion of the $6.4 billion acquisition of HashiCorp, as well as the already completed acquisitions of StreamSets and webMethods, are expected to drive revenue growth in IBM's software segment. Stifel also points to the next mainframe cycle expected at the beginning of 2025, which could generate approximately $1.5 billion in infrastructure revenue in its first year—further evidence of IBM's strong growth prospects. This development is complemented by the acquisition of Prescinto, a leading company in the management of renewable energy assets. This move strengthens IBM's position in the "green" energy sector and integrates AI-powered tools into the Maximo Application Suite. In a world increasingly turning to sustainable solutions, IBM is gearing up to become a leader in AI and energy. This combination of strategic acquisitions and a forward-looking growth plan positions IBM to benefit from major market developments, allowing investors to look to the future with confidence.