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Investing.com - BofA Securities lowered its price target on International Business Machines stock to $300 from $340 while maintaining a Buy rating. The stock currently trades at $230.76, down 21.65% year-to-date and near its 52-week low of $220.72, though InvestingPro analysis suggests IBM remains undervalued at current levels with a Fair Value of $283.
The firm expects IBM (NYSE:IBM) to report first-quarter results on April 22. Analyst Wamsi Mohan estimates Confluent will contribute approximately $50 million in revenue for the first quarter after the acquisition closed on March 17, roughly one quarter earlier than expected.
BofA adjusted its second-quarter earnings per share estimate lower by approximately $0.15 to reflect a full quarter of dilution from the Confluent acquisition. The firm also reduced its fiscal 2026 infrastructure revenue estimates to account for lapping strong growth from the z17 launch.
BofA expects IBM to leave its fiscal 2026 guidance unchanged, as the company will likely aim to offset incremental dilution with the added quarter of revenue and cost synergies. The firm anticipates investor focus on Confluent acquisition integration, Red Hat consumption growth, and sustainability of IBM’s software and consulting segments. IBM reports earnings on April 22, just nine days away, with analysts forecasting EPS of $12.61 for fiscal 2026.
Mohan stated the firm sees fiscal 2026 as a more modest year for IBM as it integrates Confluent and as the industry works through the impact of the AI agent disruption narrative. BofA cited IBM’s software moat, free cash flow growth potential, and shift to higher-margin software as reasons for maintaining its Buy rating. The company’s attractive PEG ratio of 0.28 and 30 consecutive years of dividend increases underscore its long-term value proposition.
In other recent news, IBM has been active with several significant developments. Stifel has adjusted its price target for IBM, lowering it from $340 to $290, while maintaining a Buy rating. This adjustment comes in light of potential headwinds from the Gulf conflict and foreign exchange impacts, though the early closing of the Confluent acquisition is seen as a positive factor. IBM has also announced a partnership with Arm to develop dual-architecture hardware aimed at AI and data-intensive workloads, combining IBM’s enterprise capabilities with Arm’s architecture. Additionally, IBM has received FedRAMP authorization for 11 AI software solutions, enabling federal agencies to utilize these solutions on AWS GovCloud while adhering to compliance requirements. In a long-term initiative, IBM is collaborating with ETH Zurich on a 10-year research project focused on developing algorithms that integrate artificial intelligence and quantum computing. Furthermore, IBM’s quantum computer has successfully simulated magnetic materials, with results aligning with neutron scattering experiments conducted at national laboratories. These developments highlight IBM’s ongoing efforts in advancing technology and expanding its capabilities across various sectors.
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