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Investing.com - UBS raised its price target on IBM (NYSE:IBM) to $200 from $195 while maintaining a Sell rating following the company’s mixed second-quarter results. IBM’s stock currently trades at $282.01, near its 52-week high of $296.16, having delivered an impressive 57.89% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The investment firm noted that pressure across verticals like Federal impacted IBM’s Consulting segment, though this was offset by the widely expected launch of the z17 mainframe late in the quarter. Despite these challenges, InvestingPro data shows IBM maintains a GOOD financial health score, with particularly strong marks in profitability metrics.
UBS expressed concern about IBM’s Software (ETR:SOWGn) segment, which showed further slowing in organic growth to 5% from 6% in March and 8% in December 2024, viewing this as a negative factor in the quarterly results.
IBM maintained its calendar year 2025 constant currency revenue guidance of "at least 5%" while slightly adjusting its free cash flow guidance language to "more than $13.5 billion" from "about $13.5 billion" in the previous quarter.
UBS analysts believe IBM faces increasing pressure to announce a larger software acquisition to drive mid-single digit constant currency revenue growth next year, as the contribution from Hashi will be lapped in early 2026, potentially making 5% growth in 2026 more difficult to achieve without software M&A.
In other recent news, International Business Machines (IBM) reported its second-quarter earnings for 2025, surpassing analyst expectations with robust financial results. The company announced earnings per share of $2.80, exceeding the forecasted $2.65. Additionally, IBM generated revenue of $17 billion, surpassing the anticipated $16.59 billion. These results highlight the company’s strong performance in the recent quarter. Following the earnings announcement, IBM’s stock price showed a positive reaction in aftermarket trading. Investors and analysts alike are taking note of these developments. Analysts from various firms have been closely monitoring IBM’s performance. These recent developments are part of the ongoing analysis and scrutiny that IBM receives from the financial community.
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