SoFi shares rise as record revenue, member growth drive strong Q3 results
Investing.com - Stifel lowered its price target on IBM (NYSE:IBM) to $295.00 from $310.00 on Thursday while maintaining a Buy rating, as the tech giant’s shares fell 6-7% in morning trading despite beating quarterly expectations. The stock, which has delivered an impressive 30.54% year-to-date return, is currently trading above its InvestingPro Fair Value.
IBM reported 7% year-over-year revenue growth and 16% earnings per share growth, primarily driven by strong performance in its mainframe and consulting segments. The $258.5 billion market cap company made a modest increase to its 2025 guidance, maintaining revenue growth of 5%+ and free cash flow of $13.5 million or higher. According to InvestingPro, IBM maintains strong financial health with a robust gross profit margin of 57.57%.
The stock decline appears linked to IBM’s software segment, which missed expectations with 5% organic growth. Red Hat decelerated and is expected to decelerate further in the fourth quarter, though it continues to grow at double-digit rates after normalizing for comparisons. Despite these challenges, IBM remains a prominent player in the IT Services industry, with analyst price targets ranging from $200 to $350.
IBM reiterated its annual software guidance of approximately 10% year-over-year growth, though Stifel noted the implied fourth-quarter guidance of 11-12% growth looks aggressive. The firm models around 9% growth, suggesting fourth-quarter segment performance similar to the third quarter.
Stifel maintained its 2026 estimates of 4% revenue growth and 8% EPS growth, reflecting mainframe product cycle dynamics and depressed services growth, while noting IBM’s 18% stock gain over the past seven weeks created a difficult setup for the quarterly report.
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, above the anticipated $16.09 billion. Evercore ISI maintained its Outperform rating and $315 price target for IBM, highlighting the company’s strong earnings performance driven by software and infrastructure growth. RBC Capital, however, adjusted its price target for IBM to $300 from $315, citing concerns about the deceleration in Red Hat’s performance. BMO Capital raised its price target for IBM to $305 from $300, noting reasonable quarterly results with improved software growth and solid margins. Meanwhile, Goldman Sachs reiterated its Buy rating with a $350 price target, despite acknowledging some weakness in software results and slower Red Hat growth. These developments reflect varying analyst perspectives on IBM’s recent performance and future potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.