Brian White: 2016 Will Be Better For IBM
In a report published Wednesday, Cantor Fitzgerald analyst Brian White maintained a Buy rating on International Business Machines Corp. (NYSE: IBM), with a price target of $198.
IBM's shares plunged 10 percent over the past two weeks, due to the negative reaction to the company's 2Q results and a weak tech tape. Analyst Brian White believes 2015 would be a "transition year" for IBM and expects the company to perform better in 2016, as it begins benefiting from its "strategic imperative initiatives."
"We believe there are many complex dynamics occurring in IBM's Software and Services business that are difficult for the market to fully appreciate, thus there is a common belief that the cloud is materially eating into these segments, but we disagree," White wrote.
IBM had missed expectations over the past two years, since it was transitioning its portfolio and divesting underperforming businesses, while also being impacted by significant currency headwinds. White believes that the company's 2Q results were "healthy and better than most performances over the past two years."
In the report Cantor Fitzgerald noted, "As part of IBM's transition is the shift to next generation areas of IT that includes analytics, cloud, mobile, social and security, which are referred to as strategic imperatives by IBM… we believe it is possible for growth in IBM's strategic imperatives to offset the decline in the company's portfolio within the next 12-24 months."
"Additionally, the extremely negative sentiment around the stock with an attractive valuation continues to stand out to us and thus we believe an attractive play for value/contrarian investors," White commented.
Image credit: Ruben de Rijcke, Wikimedia
Latest Ratings for IBM
|Jan 2017||Guggenheim||Initiates Coverage On||Neutral|
|Nov 2016||Bank of America||Upgrades||Neutral||Buy|
|Oct 2016||Goldman Sachs||Maintains||Neutral|
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