IBM Shares Jump After Analyst Upgrade

Shares of IBM climbed higher in pre-market trading on Wednesday after receiving an upgrade from RBC Capital Markets.

The firm upgraded IBM from “sector perform” to “outperform” and said that it expects a range of secular and cyclical
catalysts to push shares even higher this year.

A team of analysts led by Amit Daryanani wrote, “A return to gross margin stability coupled with revenue growth in 2018 should set-up the stock for a year of out performance especially considering the depressed valuation.”

“We think IBM is an attractive large-cap value stock for investors in 2018 as the potential for revenue and margin stability should enable a re-rating.”

According to the firm, IBM’s valuation of 11 times price-to-earnings and dividend yield over 3% make the stock “very attractive” in 2018.

RBC also raised its stock price target from $160 to $180. The new price target represents a 17% upside to Tuesday’s closing price for the stock.

Disclaimer: We have no position in IBM Common Stock (NYSE: IBM) and have not been compensated for this article.

Sofia Vida

Sofia has been writing for major news outlets for over 15 years. In her spare time she enjoys hiking, walking her dogs, and going to concerts.

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