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Investing.com - BMO Capital has raised its price target on IBM (NYSE:IBM) to $305.00 from $300.00 while maintaining a Market Perform rating on the stock. The tech giant, currently trading near its 52-week high of $301.04, has delivered an impressive 30.54% return year-to-date, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
The firm described IBM’s quarter as "reasonable," highlighting better Software growth that was helped by HashiCorp and a return to growth in the Consulting segment. BMO also noted solid margins and free cash flow in IBM’s recent performance. With a market capitalization of $267.82 billion and a steady 2.39% dividend yield, IBM maintains its position as a prominent player in the IT Services industry.
Despite these positive elements, BMO pointed to disappointing results from Red Hat and TP, which the firm believes could drive near-term consolidation in IBM shares.
BMO indicated that greater conviction in the durability of organic software growth, including generative AI traction, and/or AI workloads running on IBM hardware, could help the firm become more constructive on the shares.
The firm maintained its Market Perform rating with the new $305 target price, stating that the risk/reward is balanced given IBM’s current organic run rate.
In other recent news, IBM reported its third-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share of $2.65, exceeding the forecasted $2.44, with revenue reaching $16.33 billion, outpacing the anticipated $16.09 billion. This performance was bolstered by a 9% increase in software growth, a return to 2% growth in consulting, and a 15% rise in infrastructure due to the z17 mainframe cycle. Evercore ISI maintained its Outperform rating for IBM, with a price target of $315, reflecting confidence in the company’s solid earnings. Meanwhile, Goldman Sachs reiterated its Buy rating and set a price target of $350, despite noting some concerns over slightly softer software results, particularly in Transaction Processing and Red Hat growth. These recent developments highlight IBM’s strong financial performance and ongoing strategic initiatives.
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