Investing.com - BofA Securities lifted its price target on IBM (NYSE:IBM), saying the tech giant is positioned for sustained growth and improving free cash flow.
The investment bank lifted its 12-month price target on IBM to $220 from $200, with the stock down 1% at $194.81, at 10:50 ET (14:50 GMT).
Cumulative cash flows of over $19 billion (CY24-26) post dividends (plus the ability to borrow) allows for continued focus on M&A, BofA Securities said, in a note, with free cash flow accretion over two years.
“M&A should continue to drive incremental growth in revs and FCF over time. Over the last 4 years ([Arvind] Krishna‘s time as CEO), IBM has made 39 acquisitions with most of them in software but some in consulting,” BofA Securities said.
BofA Securities keep a ‘buy’ rating, “as the turnaround at IBM (rev growth and FCF improvement) continues, with a defensive portfolio, attractive dividend yield and underappreciated AI capabilities.”