IBM (IBM) PT Raised to $200 at UBS

UBS analyst David Vogt raised the price target on IBM (NYSE: IBM) to $200.00 (from $195.00) while maintaining a Sell rating.

The analyst comments "IBM's reported mixed Q2 results with pressure (-) across verticals like Federal impacting 'Consulting' offset by the widely expected launch of the z17(+) late in the quarter that effectively nets each other out in our view. The swing factor in the qtr that tilts the results more negatively in our view was 'Software' organic growth further slowing to 5% from 6% in March and 8% in Dec-24. While, the company left the CY25 cc rev guide unch "at least 5%" it slightly tweaked the FCF guidance language to "more than $13.5B" from "about $13.5B" last qtr, similar to the edit last year but below investor expectations for a more substantial raise to $14.0B. Finally, with organic 'Software' growth slowing, modest M&A YTD increases the pressure on IBM to announce a larger software acquisition sooner than later to drive mid-single digit cc rev growth next yr as the contribution from Hashi is lapped in early CY26. Therefore, we are concerned 5% growth in CY26 could be tougher to achieve without software M&A going forward."

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