Bernstein SocGen Group Reiterates Market Perform Rating on IBM (IBM)

Bernstein SocGen Group analyst Mark C. Newman reiterated a Market Perform rating and $280.00 price target on IBM (NYSE: IBM).

The analyst commented: "A Lukewarm beat driven by Mainframe and Consulting as Red Hat decelerates; IBM FQ3 results beat on revenue, EPS and FCF led by strength in mainframe and consulting with Red Hat deceleration relatively disappointing.Tweaking estimates up slightly. Maintaining TP at $280, Market-Perform.

Software relative weakness: Red Hat deceleration appears to have been a worry driving shares down post market close, however the company showed strong bookings growth and confidence that this will help bring Red Hat back to mid-teens YoY growth. Transaction Processing was also weak due to (according to IBM) customers focusing more on mainframe IBM Z following the recent z17 launch.

We believe the re-rating from IBM’s transformation to higher growth, higher profitability, led by software and in particular hybrid cloud, has already played out."

For an analyst ratings summary and ratings history on IBM click here. For more ratings news on IBM click here.

Shares of IBM closed at $285.00 yesterday.

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