IBM stock price target raised to $310 from $290 at Stifel

Investing.com - Stifel raised its price target on IBM (NYSE:IBM) to $310.00 from $290.00 on Wednesday, while maintaining a Buy rating on the technology company’s stock. The stock, currently trading near its 52-week high of $296.16, has delivered an impressive 56.75% return over the past year. According to InvestingPro data, IBM appears to be trading above its Fair Value, with 14 additional exclusive insights available to subscribers.

The research firm cited IBM’s positive fundamental outlook ahead of its second-quarter earnings report, due on July 23, describing the company as a "stable/defensive compounder" with mid-single-digit revenue growth potential and annual margin expansion that should yield mid-to-high-single-digit earnings and free cash flow growth. The company maintains a robust gross profit margin of 57.04% and offers a steady dividend yield of 2.38%.

Stifel noted several near-term revenue tailwinds for IBM, including the z17 mainframe cycle released in mid-June and the company’s ability to leverage recent software acquisitions like Hashi and DataStax into its installed base and global distribution network.

The firm highlighted that operational improvements and favorable mix shift toward software should drive annual margin expansion for IBM, with potential near-term assistance from foreign exchange factors.

While Stifel maintains an above-consensus earnings estimate for IBM in 2026, approximately 4-5% higher than the consensus, it cautioned that predicting upward earnings revisions in the current environment remains difficult, suggesting that a post-second-quarter report might present a more opportunistic entry point for investors.

In other recent news, IBM has unveiled its Power11 servers, claiming enhanced ransomware protection and zero planned downtime, with availability starting in July 2025. The Power11 servers boast significant performance improvements and energy efficiency, targeting mission-critical workloads in sectors like banking and healthcare. In collaboration with Deutsche Telekom (OTC:DTEGY), IBM’s AI-powered solution, IBM Concert, will be used to enhance patch management, reducing vulnerability protection times significantly. Additionally, IBM has partnered with Parsons (NYSE:PSN) Corporation to modernize the U.S. air traffic control system, aiming to integrate the latest technologies for improved safety and resilience. Evercore ISI has reiterated its outperform rating on IBM stock, citing sector data and potential impacts from Accenture (NYSE:ACN)’s recent performance. Meanwhile, BofA Securities has raised its price target for IBM to $320, maintaining a Buy rating, highlighting the company’s growth potential in AI and quantum computing. These developments reflect IBM’s strategic positioning in emerging technologies and its ongoing transformational initiatives.

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