UBS Analyst Advises Selling IBM Stock Despite Positive Catalysts

UBS analyst David Vogt recommends selling IBM stock despite raising its price target from $170 to $195. Vogt cites mixed demand, particularly in the Software and Consulting divisions, as a concern. Bank of America and Evercore ISI, however, are more optimistic, raising their price targets and maintaining Buy ratings. The average IBM price target is $281.50, implying 2.1% downside risk.

IBM (IBM) has seen a mixed response from analysts following a recent update by UBS. The investment bank raised its price target on IBM from $170 to $195, yet maintained a Sell rating [1]. UBS analyst David Vogt cited mixed demand, particularly in IBM's Software and Consulting divisions, as a primary concern. Vogt noted that a weaker U.S. dollar and the launch of IBM’s next mainframe cycle (z17) could boost second-quarter revenue. However, these positives might not be sufficient to offset the mixed demand in IBM's key divisions. Additionally, UBS warned that spending cuts, especially in government consulting projects, could negatively impact the company’s growth this quarter.

In contrast, Bank of America and Evercore ISI have expressed more confidence in IBM’s long-term outlook. Bank of America’s five-star analyst, Wamsi Mohan, increased his target from $290 to $320, arguing that IBM has shifted its focus to faster-growing software businesses and cut back on slow, high-cost operations [1]. Evercore ISI also sees a brighter future for IBM, raising its price target from $275 to $315. Five-star analyst Amit Daryanani expects IBM to grow revenue in the mid-to-high single-digit range and believes that the company could earn between $16 and $18 per share annually within the next three years [1].

Wall Street analysts currently hold a Moderate Buy consensus rating on IBM stock, with an average price target of $281.50 per share, implying a 2.1% downside risk [2]. The company is scheduled to release its earnings on July 23, 2025, with projected earnings per share (EPS) of $2.64, reflecting an 8.64% increase from the same quarter last year. Full-year Zacks Consensus Estimates call for earnings of $10.95 per share and revenue of $66.21 billion, representing year-over-year changes of +6% and +5.5%, respectively [2].

IBM's recent trading performance has been mixed, with the stock closing at $283.59 on July 2, 2025, down 1.34% from the previous trading session. The stock's performance lagged the S&P 500's daily loss of 0.33% and the technology-dominated Nasdaq’s decrease of 0.22% [2]. The company has also announced significant investments in artificial intelligence (AI) and cloud computing, aiming to enhance its competitive edge in the tech industry. IBM has launched a new suite of security products and unveiled a strategic partnership with a leading technology firm to co-develop quantum computing solutions [3].

In summary, while UBS remains cautious about IBM's near-term prospects due to mixed demand, other analysts like Mohan and Daryanani are more optimistic about the company’s long-term growth. Investors should closely monitor IBM's earnings report and the company's strategic initiatives to gauge the stock's performance.

References:
[1] https://www.tipranks.com/news/sell-now-says-ubs-about-ibm-stock
[2] https://www.nasdaq.com/articles/why-ibm-ibm-dipped-more-broader-market-today
[3] https://www.ainvest.com/news/ibm-10-78-billion-trading-volume-ranks-65th-ai-cloud-investments-2507/