IBM Stock Upgraded by UBS After Steep 2026 Decline
UBS has shifted its stance on IBM from Sell to Neutral following a 22% plunge in 2026, arguing the risk/reward profile now appears balanced. The downgrade was triggered by Anthropic's Claude Code announcement of COBOL modernization tools, which sparked fears of disruption to IBM's mainframe business.
Despite the selloff, IBM trades at a mid-teens discount to the broader market at 18.5x forward earnings. The company posted better-than-expected Q4 results with EPS of $4.52 against estimates of $4.33, while revenue grew 12.2% year-over-year to $19.69 billion.
Analysts remain cautiously optimistic, maintaining a Moderate Buy rating with an average price target of $330.07. The February 23rd single-day 13% drop—prompted by AI disruption concerns—was deemed overdone by several firms citing IBM's entrenched customer base and mainframe migration complexities.
