BofA Reiterates Buy on IBM Ahead of Q2 Earnings

BofA Securities reiterated its Buy rating on IBM (NYSE:IBM) with a $320 price target, highlighting the company’s defensive positioning and potential for steady growth as it approaches second-quarter earnings on July 23rd.

The firm expects results to reflect mixed trends across IBM’s business segments. Red Hat (RHT) is anticipated to show growth acceleration, while Consulting may underperform, mirroring softness seen among industry peers. IBM could also benefit from favorable foreign exchange movements, providing a slight tailwind to earnings.

Despite some near-term challenges, BofA maintains a bullish stance on IBM due to its stable revenue base, improving cash flow, and ability to deploy capital for strategic acquisitions. The bank expects IBM to largely stick with its full-year guidance, though there could be minor adjustments—slightly lower expectations for Transaction Processing and modest upside for Red Hat.

With a focus on recurring revenue streams and a growing software footprint, IBM remains a defensive investment opportunity with upside potential as it continues to balance growth initiatives with shareholder returns.