Bernstein analyst Mark C. Newman raised his price target on IBM (NYSE:IBM) to $330.00 from $280.00 while retaining a Market Perform rating following the company’s fourth-quarter results. The new target implies roughly a 7% upside from current trading levels; IBM has been trading near its 52-week high of $324.90 and has delivered a 22.8% return over the past year.
IBM reported results that beat consensus expectations across multiple metrics in the latest quarter. The company posted $19.7 billion in revenue for the fourth quarter and earnings per share of $4.52, surpassing analysts’ projected $19.2 billion in revenue and $4.31 in EPS. On a full-year basis, the company recorded $67.5 billion in revenue for the last twelve months, equivalent to 7.6% growth.
Management provided forward-looking guidance for fiscal year 2026 that calls for revenue growth of more than 5% on a constant-currency basis. The company also expects profit margin expansion of about one percentage point and approximately $15.7 billion in free cash flow for FY26. For the first quarter of 2026, IBM said its expectations for revenue growth and margin improvement are consistent with the full-year guidance.
IBM is targeting completion of its Confluent acquisition by mid-2026. Management flagged that the deal is expected to produce roughly $600 million in pretax income dilution in the second half of 2026. The company projects the acquisition will be accretive to adjusted EBITDA in fiscal 2027 and accretive to free cash flow in fiscal 2028.
Despite Bernstein’s observation that IBM’s heavy exposure to software and consulting makes parts of the business vulnerable to potential AI-driven devaluation, the firm noted the company’s valuation "has been remarkably resilient and continues to expand." Bernstein’s updated sum-of-the-parts analysis indicates that some of the long-term upside tied to IBM’s nascent Quantum business appears to be reflected in the stock price already.
Other investment firms also revised their views after the quarter. Evercore ISI kept an Outperform rating and set a $345 price target, while removing the stock from its Tactical Outperform list. Stifel raised its target to $340 from $325 and maintained a Buy rating, citing strong free cash flow. RBC Capital adjusted its target to $361 from $350, pointing to the company’s execution and stability. Credit agency Moody’s affirmed IBM’s A3 senior unsecured rating and changed the outlook from negative to stable, attributing the move to strong operating performance.
Market reaction and analyst updates reflect a broadly positive reassessment of IBM’s near-term financial trajectory following the quarter. Key company targets for FY26 - revenue growth above 5% at constant currency, about one percentage point of margin expansion, and roughly $15.7 billion in free cash flow - are central to how analysts and credit watchers are calibrating their estimates and ratings.
Investors will also be watching the timing and financial impact of the Confluent acquisition, particularly the expected $600 million pretax income dilution in the second half of 2026 and the company’s timeline for accreting adjusted EBITDA in FY27 and free cash flow in FY28.