RBC Capital Markets Lowers IBM PT while Keeping Bullish Rating

Vardah Gill

Mon, May 18, 2026 at 5:18 PM EDT 2 min read

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

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.

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