BUZZ - "Broker Views": As analysts turn optimistic, IBM's recovery momentum is strengthening

October 22 - ** IBM IBM.N Chief Financial Officer James Kavanaugh stated on Wednesday (link) that the delayed software deals which unsettled investors in the previous quarter are beginning to close. The company has raised performance expectations for this business and released better-than-expected third quarter financial results.

** Shares of the American technology company fell about 6% in pre-market trading.

Recovering ground

** Barclays (maintains “Overweight” rating, target price: $262) noted that the rebound in transaction processing software and strong momentum in Red Hat and data businesses supported this quarter's performance, with the data business achieving its strongest growth so far this year.

** RBC Capital Markets (“Outperform” rating, target price: $270) stated that although investors remain skeptical about mainframe business and software services outside transaction processing products, the institution believes both business segments are moving in the right direction.

** Morgan Stanley (“Neutral”, target price: $240) stated that previous delays in deal closures weighed on the last quarter’s results, but IBM has recovered; robust growth in distributed infrastructure and continued cost savings helped offset margin pressures.

** JPMorgan (“Overweight”: $296) said IBM’s recovery reinforces its positive outlook, supported by Red Hat, data software, mainframe cycles, and growing demand for artificial intelligence infrastructure.

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