IBM price target lowered to $300 from $315 at RBC Capital

Investing.com - RBC Capital has lowered its price target on IBM (NYSE:IBM) to $300.00 from $315.00 while maintaining an Outperform rating on the stock. The tech giant, currently trading at $287.51 with a market cap of $267.82 billion, has shown impressive momentum with a 30.54% gain year-to-date.

The firm adjusted its target following IBM’s recent quarterly results, which showed positive headline numbers but raised concerns about Red Hat’s performance deceleration. According to InvestingPro analysis, IBM maintains a "GOOD" overall financial health score, suggesting solid fundamental strength despite these concerns.

RBC Capital noted that management highlighted 20% Red Hat bookings growth as a positive indicator for 2026, though Q4 is likely to continue experiencing consumption headwinds.

The analyst pointed to continued strength in IBM’s Automation segment as well as ongoing infrastructure refresh activity as positive factors in the quarterly results.

IBM also raised its fiscal year 2025 free cash flow and revenue guidance, which RBC Capital acknowledged while explaining its price target reduction was based on changes to IBM’s revenue mix.

In other recent news, IBM reported its third-quarter 2025 earnings, surpassing analysts’ expectations with earnings per share of $2.65, compared to the forecast of $2.44. The company’s revenue also exceeded projections, reaching $16.33 billion against an anticipated $16.09 billion. This performance was driven by 9% growth in software, a 2% increase in consulting, and a 15% rise in infrastructure attributed to the z17 mainframe cycle. Evercore ISI has maintained its Outperform rating on IBM, with a price target of $315, following these solid earnings results. BMO Capital also raised its price target on IBM to $305 from $300, highlighting better software growth and solid margins. Meanwhile, Goldman Sachs reiterated its Buy rating with a $350 price target, despite noting some concerns over slightly softer software results, particularly in Transaction Processing and slower Red Hat growth. These developments reflect a mix of optimism and caution among analysts regarding IBM’s recent performance.

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