RBC Capital Markets Lowers IBM PT while Keeping Bullish Rating

International Business Machines Corporation (NYSE:IBM) is included among the 10 Best “Dogs of the Dow” Stocks to Buy for the Rest of 2026.

RBC Capital Markets Lowers IBM PT while Keeping Bullish Rating

On May 7, RBC Capital Markets lowered its price recommendation on International Business Machines Corporation (NYSE:IBM) to $300 from $330. It reiterated an Outperform rating on the stock. The firm updated its model after attending IBM’s Think user conference, where management discussed the strategic outlook for the company’s core businesses, including hybrid cloud and AI, along with a growing focus on quantum computing. According to the analyst, the lower price target mainly reflects compression in peer valuation multiples.

During the company’s Q1 2026 earnings call, CFO James Kavanaugh reaffirmed IBM’s full-year guidance. He said the company’s strong start to the year increased confidence in delivering constant-currency revenue growth of more than 5% in 2026, along with nearly $1 billion in year-over-year free cash flow growth.

For the second quarter, Kavanaugh said constant-currency revenue growth was expected to stay in line with the company’s full-year outlook. He also noted that IBM expected around 50 basis points of expansion in operating pre-tax margin. Gains from software mix improvements and productivity initiatives are expected to offset dilution related to the early closing of Confluent.

International Business Machines Corporation (NYSE:IBM) provides hybrid cloud, artificial intelligence, and consulting services globally. The company operates through its Software, Consulting, Infrastructure, and Financing segments.

While we acknowledge the risk and potential of IBM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IBM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 12 Best Micro-Cap Dividend Stocks To Buy Now and 11 Best Rising Dividend Stocks to Buy Right Now

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1