Morgan Stanley: this stock is a place to hide amidst growing macro risks

on Apr 14, 2022
  • Morgan Stanley rates IBM at "overweight" with a price target of $150.
  • Shannon Saccocia agrees with the bullish call on CNBC's "Halftime Report".
  • Shares of the American IT company have recovered 5.0% since March 1st.

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Shares of IBM Corporation (NYSE: IBM) have recovered 5.0% since March 1st but a Morgan Stanley analyst says the stock is only warming up for what’s to come next.

Erik Woodring sees another 18% upside in IBM

Erik Woodring on Thursday raised his rating on IBM to “overweight” and announced a price target of $150 a share that represents another 18% upside from here.

The Morgan Stanley analyst says IBM is a “defensive play” and a suitable stock to hide amidst higher costs and geopolitical tensions that are likely to results in a hit to hardware budgets. In his note, Woodring wrote:

IBM is likely to outperform in a scenario of IT hardware budget cuts, with over half of revenue derived from more defensive recurring streams and only 20% of IBM’s revenue directly tied to hardware and related OS revenue.

Shannon Saccocia agrees with the bullish call

IBM is set to report its quarterly results next week. Agreeing with the bullish call on CNBC’s “Halftime Report”, Boston Private’s Shannon Saccocia said this afternoon:

Really like the stock. It’s got a very strong dividend yield. They’re repositioning their overall business. So, I do see it as a safer place within technology. But I also think there will be growth here and it’s not just a sit and wait staple of the sector.

In its fiscal fourth quarter, IBM topped Wall Street expectations on both top and the bottom line. The stock trades at a PE multiple of 24.95.


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