Equity research: IBM

International Business Machines Corporation, commonly known as IBM, has spent decades building relationships with the world’s largest enterprises, financial institutions and governments. As these organisations wrestle with increasingly complex technology environments, IBM’s combination of software, consulting and infrastructure expertise puts it in a position few competitors can match. 

The workplace is being reshaped by artificial intelligence, and nowhere is this more visible than inside large organisations trying to connect legacy systems, private infrastructure and public cloud into something coherent and secure. That need for integration is quickly becoming one of the defining themes in enterprise technology spending.

IBM’s watsonx platform gives large organisations tools to build, govern and automate AI powered workflows, while its consulting arm helps translate that technology into practical change across complicated organisational structures. Alongside this sits a dependable mainframe business and a growing base of recurring software revenue, giving the company multiple ways to benefit as AI adoption accelerates.  

Realising this opportunity depends heavily on execution. Enterprise AI adoption means guiding large organisations through complex technology transformations, spanning legacy systems, private infrastructure and public cloud, and outcomes will hinge on how well providers manage that complexity rather than on demand alone.  

We believe IBM is well positioned to benefit from the accelerating shift toward enterprise AI adoption, supported by deeply embedded customer relationships and broad technology capabilities across its global client base.

Valuation, price targets and outlook 

We have set a positive twelve-month price target for IBM, based on a DCF model that reflects the company’s growth outlook and risk profile. This points to meaningful upside from current levels, and we rate the shares Buy. The full breakdown of our valuation approach, including the target price and underlying assumptions, is set out in the complete research report.

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This equity research document is issued by Calamatta Cuschieri Investment Services Ltd “CCIS”. Newly issued research recommendations and target prices supersede previously published research.  

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