AmTech Reiterates Buy on IBM (IBM); $142 Price Target

June 2, 2008 11:31 AM EDT

American Research Technology reiterates its Buy rating and $142 price target on IBM Corp. (NYSE: IBM). The firm's price target represents a potential return of about 11% from today's current price around $127.58.

Based on supply chain checks, the firm believes IBM's June quarter is on track to meet or exceed the Street's estimates of $25.7 billion in sales and $1.81 in earnings. AmTech calls IBM's new Z10 mainframe a key driven of current momentum as the new device affects about 15-20% of IBM's total revenues, including "hardware and associated software, services and financing."

AmTech remains confident in IBM as the company can be considered a "fairly defensive play given its high exposure to international markets (66%), broad product and services portfolio, and inexpensive valuation of 13.6x CY09 EPS." The firm also likes IBM's strong positioning within the BRIC countries.

International Business Machines Corporation (IBM) develops and manufactures information technologies, including computer systems, software, networking systems, storage devices, and microelectronics worldwide.

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