IBM’s stock price will rally due to strong demand in key technology growth markets, according to UBS.
The firm raised its rating to buy from neutral for the company, predicting IBM will generate earnings above expectations next year.
“We think sustainable growth for IBM is on the horizon,” analyst John Roy said in a note to clients Tuesday. “The mainframe cycle will be ending and the FX headwinds are likely to hurt the top-line optics, but we believe this is priced in. IBM is operating better but we believe the multiple could expand as it beats expectations on Analytics and Cloud.”