Benzinga - by Surbhi Jain, .
International Business Machines Corp (NYSE:IBM), will be reporting its first-quarter earnings on Wednesday. Wall Street expects $1.59 in EPS and $14.6 billion in revenues as the company reports after market hours.
IBM stock is up over 45% in the past year, and has risen 11.75% YTD. IBM stock is being propelled by its rapid product deployment, focused attention on AI, and robust cash flows.
As investors prepare for IBM’s upcoming earnings report, insights from BofA Securities shed light on the company’s trajectory and potential.
The IBM Analyst
The IBM Investment Thesis Ahead Of Q1 Earnings
IBM’s Continued Turnaround
Additionally, Mohan anticipates IBM’s potential for share gains and stable margins, particularly in light of its focus on enterprise AI adoption and software growth. “Longer term, we expect IBM to take share in IT spending with its Cloud and AI initiatives,” said Mohan.
Related: IBM Will Expand Its Cloud Operations In Canada With Launch Of New Cloud Multizone Region To Open In Montreal, Quebec
Mohan underscores the significance of IBM’s consulting segment, especially amidst softness in the consulting industry. Despite challenges faced by peers like Accenture PLC (NYSE:ACN), he remains optimistic about IBM’s signings momentum and expects the company to maintain its guidance for the year.
Mohan also anticipates IBM’s continued turnaround, driven by revenue growth and improvement in free cash flow.
AI Adoption At IBM
In terms of enterprise AI adoption, Mohan highlights IBM’s significant book of business related to GenAI, expecting further growth in this area. He anticipates updates on enterprise AI proof of concepts and pipeline insights in the upcoming earnings report.
Looking ahead, Mohan maintains his expectation of strong free cash flow of around $12 billion in 2024, driven by higher profitability and strategic adjustments in cash requirements.
IBM Price Action: Shares of IBM finished 0.16% higher at $182.19 on Tuesday.
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Latest Ratings for IBM
| Jan 2022 | BMO Capital | Maintains | Market Perform | |
| Jan 2022 | UBS | Downgrades | Neutral | Sell |
| Jan 2022 | Goldman Sachs | Initiates Coverage On | Neutral |
View the Latest Analyst Ratings
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