Stifel just raised its price target on IBM (IBM, Financial) to $246 from $205, keeping a firm Buy rating on the stock. Despite Q3 being seasonally weak, the analysts expect IBM to deliver a modest earnings per share (EPS) outperformance while revenue might not impress as much. They see IBM as a solid defensive growth play with a 2.9% dividend yield, but note that the stock looks a little stretched ahead of the earnings report. Stifel is positioning IBM as more appealing on any potential weakness post-report, while the setup for 2025 remains undeniably strong.
IBM's strategic acquisitions are setting the stage for serious long-term gains. The company's $6.4 billion HashiCorp acquisition, which could close soon, and its completed buyout of StreamSets and webMethods, are expected to drive revenue growth in IBM's software segment. Stifel also calls out the next mainframe cycle slated for early 2025, estimating it could bring in around $1.5 billion in infrastructure revenue within the first year, reinforcing IBM's ability to hit its growth targets.
Adding to the mix is IBM's recent acquisition of Prescinto, a leader in renewable energy asset management. This move strengthens IBM's position in the green energy sector and integrates AI-driven tools into its Maximo Application Suite. As the world shifts toward sustainable solutions, IBM is gearing up to dominate both AI and energy sectors, making it a key player to watch. The combination of strategic acquisitions and a forward-looking growth plan has IBM set to capitalize on big market trends, leaving investors with plenty to look forward to.
