Wamsi Mohan, an analyst from Bank of America, has raised his 12-month price target for International Business Machines Corp. (IBM) to $330, up from $315. This increase aligns with IBM's stock price approaching a significant multi-month resistance level, currently trading at $296.94. The revised target indicates an upside of approximately 11.13% within the next year.
Analyst's Insights and Growth Expectations
In a client note dated July 6, Mohan maintained a Buy rating on IBM shares, highlighting several positive drivers for the upgrade. He anticipates a modest increase in IBM’s FY26 revenue and free cash flow guidance. Mohan also expects faster-than-anticipated synergies from the Confluent acquisition, which will enhance the outlook for IBM's stock in the coming months.
Additionally, stronger growth is anticipated in IBM's software sector and its infrastructure segments involving power and storage. He noted that Confluent is projected to contribute $340 million in revenue for the second fiscal quarter, accounting for approximately 5% of software revenue growth.
Long-Term Prospects and Market Sentiment
Mohan emphasized the ongoing shift in IBM’s focus towards higher-margin software, a move that is fostering strong free cash flow generation. This transition is expected to provide long-term opportunities, particularly related to quantum computing initiatives.
According to data from TipRanks, the average price estimate among 17 Wall Street analysts for IBM stands at $302.94, suggesting a moderate Buy sentiment following the stock's consolidation over the past year. Currently, IBM shares are trading close to their resistance level established back in 2025.
Price Resistance Considerations
If IBM's stock encounters resistance at its current level, analysts suggest that this could challenge the validity of their forecasts. Conversely, should the stock retest this year's high, Mohan's new target may be realized.
