IBM shares got an early jolt Monday, before retreating lower, after analysts at Evercore ISI added IBM stock to their "tactical outperform" list.
IBM will report its first-quarter earnings on April 24. Analysts at Evercore expect the company to build on momentum following a strong fourth-quarter report.
Evercore analyst Amit Daryanani wrote in a client note that the firm expects IBM to report revenue of $14.6 billion and earnings per share of $1.60 for its March quarter, offering "moderate upside" to consensus estimates. That's despite some concern about IBM's results after Accenture lowered its fiscal year guidance last month.
For IBM, "we think recent macro and IT spending data points have been improving and consulting momentum should continue," Daryanani wrote.
On the stock market today, IBM stock gained 2% in early trading before retreating back to a slight loss during a down day for the markets. Shares closed at 181.25, down a half-percent.
IBM Stock: AI Momentum In Focus
Evercore maintained a positive outperform rating for IBM stock with a price target of 215 in its new note.
Meanwhile, IBM stock is up 11.7% so far this year, outpacing a 7.6% gain for the S&P 500. The company's shares surged in late January, after Big Blue reported fourth-quarter earnings and sales ahead of expectations.
The century-old company is also seen as a potential artificial intelligence winner. Its WatsonX product is focused on helping companies apply large language models to create new business tools.
Daryanani wrote that investors will be listening closely for the company's commentary on AI bookings and the technology's contribution to 2024 revenue. "We think AI benefits will start to accrue and be more material in (2025) and beyond," Daryanani wrote.
