IBM stock price target maintained at $320 by BofA ahead of earnings

Investing.com - BofA Securities has reiterated its Buy rating and $320.00 price target on IBM (NYSE:IBM) ahead of the company’s second-quarter earnings report scheduled for July 23. The stock, currently trading at $287.14 with a market capitalization of $267 billion, is approaching its 52-week high of $296.16. According to InvestingPro analysis, IBM appears to be trading above its Fair Value.

The firm expects investors are anticipating an acceleration in Red Hat (RHT) performance and potential foreign exchange tailwinds, while expecting weakness in IBM’s Consulting business similar to industry peers.

BofA Securities acknowledges a "somewhat challenging tactical setup" due to decelerating trends in certain business segments, but maintains its positive outlook on the stock.

The financial institution continues to view IBM as a defensive investment with improving revenue growth potential, which could drive higher cash flows that might be reinvested for additional mergers and acquisitions.

BofA Securities anticipates IBM will largely maintain its overall guidance for the year, with slight adjustments including lower Transaction (JO:NTUJ) Processing (TP) performance offset by better results from Red Hat.

In other recent news, IBM is preparing to release its second-quarter earnings, with analysts from RBC Capital and Stifel making notable predictions. RBC Capital increased its price target for IBM to $315, citing expected strong software performance and industry trends. Meanwhile, Stifel raised its target to $310, highlighting IBM’s potential for mid-single-digit revenue growth and margin expansion. In addition to financial expectations, IBM unveiled its next-generation Power11 servers, designed for high resilience and enhanced ransomware protection, set for availability in July 2025. The new servers promise significant performance improvements and energy efficiency. Furthermore, Deutsche Telekom (OTC:DTEGY) has selected IBM Concert for AI-powered patch management to enhance its IT security. This collaboration aims to reduce patching times significantly, showcasing IBM’s capabilities in AI and automation. Lastly, IBM has partnered with Parsons (NYSE:PSN) Corporation to modernize the U.S. air traffic control system, focusing on integrating advanced technologies to improve the National Airspace System.

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