Wall Street analyst sets IBM stock price target for 12 months

As International Business Machines Corp. stock market lost over $55 billion on Tuesday, it has received the first sell rating in three months from a top Wall Street analyst. Stephen Bersey, a decorated analyst at HSBC Holdings PLC ADR, downgraded IBM stock to a ‘Sell’ rating on July 14. Bersey reduced his 12-month price target for IBM shares to $191 from $231, thereby signaling a downside risk of about 14.4%.

“The analyst is negative on IBM due to its high valuation relative to peers and lower projected EPS growth, leading to a ‘Reduce’ rating,” the note to clients noted. HSBC’s analyst argued that IBM stock valuation has become stretched, as it trades at 22 times its estimated calendar year 2027 non-Generally Accepted Accounting Principles (non-GAAP) price-to-earnings (P/E) ratio, well above the sector median of 16.9 times. The firm also expects the company’s non-GAAP earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 10.7% between calendar years 2026 and 2028, significantly below the sector median of 19.2%. As such, Bersey expects IBM stock to experience selling pressure over the next 12 months.

Earlier in the day, Erik Woodring, a top Wall Street analyst at Morgan Stanley, assigned a hold rating for IBM stock. Nonetheless, Woodring raised his 12-month price target for IBM stock to $293 from $267. Meanwhile, Param Singh, an analyst at Oppenheimer, reiterated a Buy rating for IBM shares on Tuesday. Additionally, Singh raised his 12-month price target to $350 from $320, signaling a potential 56.7% upside. As such, 18 Wall Street analysts surveyed by TipRanks have set an average rating of Moderate Buy for IBM stock. As such, these analysts see the company’s shares surging to an average of $303.83 over the next 12 months.

IBM shares outlook Amid the bearish sentiment from Bersey, IBM’s share price plunged over 26% in five days, t...