JPMorgan Chase: Raises IBM Price Target from $270 to $291

BlockBeats News, June 23rd - In a research report, JPMorgan Chase stated that for most of the past decade, IBM has been repositioning itself from a hardware and services company to a software-led platform centered around hybrid cloud and AI.

JPMorgan analysts noted that software is now the primary driver for the company, accounting for about 45% of total revenue but around two-thirds of combined profits. "Considering the higher profit margins of software, its ability for revenue recognition on a percentage completion basis, as well as better cash conversion and higher quality earnings stream to support a higher valuation multiple than hardware and services business, we will continue to view the transition to the software field as a positive factor."

JPMorgan Chase upgraded IBM's rating from Neutral to Overweight and raised its target price from $270 to $291, citing confidence in the future accelerated growth of the software business.