Citi Sets $285 Target for IBM, Goldman Highlights Software Resilience
Citi initiated coverage on International Business Machines with a Buy rating and $285 price target, citing its defensive hardware-software franchise and stability across complex global IT environments. Goldman Sachs also maintains a Buy rating, highlighting intact software momentum despite an anticipated slowdown in mainframe growth.
1. Citi Initiates Buy Coverage
Citi initiated coverage of International Business Machines with a Buy rating and a $285 price target, citing the company’s defensive hardware-software franchise and its stability within complex global IT environments.
2. AI Demand Streams and Acquisitions
The firm identified multiple AI-related demand streams requiring limited capital outlay, along with integration benefits from recent HashiCorp and Confluent acquisitions, an ongoing mainframe upgrade cycle and long-term quantum computing prospects as key growth drivers.
3. Valuation Discount and Earnings Upside
Citi noted that IBM’s shares trade at a clear discount to larger industry peers and the broader market, arguing that favorable earnings and free cash flow revisions from recent deal activity and efficiency improvements could enhance returns.
4. Goldman Sachs Affirms Software Strength
Goldman Sachs also maintains a Buy rating on IBM, highlighting intact software momentum and a resilient core portfolio that may offset expected headwinds from slower mainframe growth.