IBM Shares in Focus as Earnings Approach Amid Bullish Analyst Sentiment

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As IBM prepares to release its quarterly financial results on January 28, a wave of positive analyst commentary is setting the stage for a potentially pivotal week for the technology conglomerate. Despite recent share price weakness prompting investor caution, market experts are pointing to the company's strategic software pivot and artificial intelligence (AI) expansion as sources of significant upside potential.

All eyes will be on the upcoming earnings report. Wall Street consensus estimates project earnings per share (EPS) of $4.29 on revenue of $19.23 billion. The performance of IBM's software segment will be under particular scrutiny. Analysts at Jefferies forecast year-over-year growth of 10.2% for this division. Hitting this target would serve as a strong validation of management's ongoing shift toward higher-margin software and consulting services. Furthermore, expectations for the 2026 outlook are substantial, with anticipated currency-adjusted revenue growth of 4% and EPS rising to $12.23.

A Surge of Upgraded Analyst Targets

In the 24 hours leading up to the report, three prominent financial institutions issued notably bullish updates, with price targets significantly exceeding the general market consensus of approximately $306.

• Jefferies reaffirmed its Buy rating, setting an ambitious price target of $360. The firm's analysis anticipates an acceleration in software growth by 2026, citing a 20% increase in Red Hat bookings.
• Evercore ISI raised its target to $330 and added IBM to its "tactical outperform" list, signaling the bank's expectation for a positive surprise in either the quarterly results or forward guidance.
• Stifel maintained its Buy recommendation with a $325 target, emphasizing the projected organic software growth of 7 to 8 percent for the 2026 fiscal year.

This collective optimism from research desks underscores growing confidence in the operational turnaround being executed by the century-old tech giant.

Expansion Moves and Shareholder Activity

Beyond quarterly numbers, IBM continues to advance its strategic agenda. The proposed $11 billion acquisition of Confluent has cleared a key regulatory hurdle with the expiration of the U.S. waiting period, though a review by Germany's Federal Cartel Office remains ongoing. This deal is viewed as a critical component for strengthening IBM's data streaming and AI infrastructure capabilities.

On the ownership front, activity has been mixed. While institutional investors like Hudson Edge increased their stakes, others such as Wilkins Investment Counsel slightly reduced their holdings. Market observers have also noted share purchases by U.S. Congressman David Taylor, an activity often interpreted as a gauge of political sentiment toward a company.

Market Context and Outlook

IBM shares closed Thursday's session at 259.25 euros, reflecting a weekly decline of roughly 15 percent. This recent pullback stands in stark contrast to the upbeat analyst commentary, potentially creating an intriguing setup should the January 28 earnings report deliver convincing results. Investors are advised to monitor the release closely to assess whether the company's fundamental progress can justify the elevated price targets now being set by Wall Street's experts.