IBM (IBM) PT Raised to $335 at BofA Securities

BofA Securities analyst Wamsi Mohan raised the price target on IBM (NYSE: IBM) to $335.00 (from $315.00) while maintaining a Buy rating.

The analyst comments "After a strong year in 2025, where IBM stock was up 38% (SPX up 18%), we expect a more modest year given a weaker close to F25 and several headwinds in F26. IBM (tentatively) reports F4Q25 on Jan 28th, where we anticipate a softer 4Q PTI margin due to workforce rebalancing initiatives, leading to F25 PTI margin expansion below guide of >100bps. We est. a workforce rebalancing expense of $400mn in 4Q, leading to 70bps of F25 y/y PTI margin expansion. We expect lower taxes to be a partial offset to EPS. For F26, IBM likely guides SW cc rev growth of ~10%, LSD% cc in Consulting, and flat cc in Infra totaling 5% cc growth for IBM (organic ~4%). CFLT is projected to close mid- year, and we assume +2% inorganic rev growth contribution to SW. We adjust our F26 numbers to reflect dilution of ~$0.40 with a minimal impact on FCF. For FCF, we model $14.0bn for F25 and expect a guide of ~$15bn in F26, maintaining 130% NI/FCF ratio. Overall, we are cautious on 4Q given workforce rebalancing and lower growth in SW. Reit. Buy on higher margin SW revs, strong FCF growth, and optionality from QC."

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