IBM IBM reported third quarter adjusted earnings of $1.81 per share on sales of $14.1 billion, beating Street’s expectations.

The Armonk, New York-based company also raised its full-year revenue growth forecast.

Webusch

Analyst Moshe Katri reiterated a Neutral rating and a price target of $140.

IBM’s weaker-than-expected margins were offset by better-than-average sales performance, Katri said in a statement.

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The company experienced a “noticeable slowdown in service bookings” while most of its peers saw record bookings and a decline in service margins, while most rivals showed margin stability, he added.

“Back-end loaded, FCF expectations, with YTD levels of $4bn, the company now needs to generate $6bn of FCFs (Q4/CY22) to reach its target of $10bn,” said the analyst continues.

BMO Capital Markets

Analyst Keith Bachman maintained a market-perform rating and price target of $148.

IBM reported strong quarterly results, led by Consulting, despite “impressive FX headwinds,” Bachman wrote in a note. “We thought the PTI margins for the Q were a bit below expectations, although the Q guidance looks achievable in December,” he added.

“IBM will face tough comparisons in FY23, however, and we believe the macro could impact all areas of growth, including consulting,” the analyst continued.

CreditSuisse

Analyst Shannon Cross reiterated an Outperform rating while the price target was lowered to $155 from $158.

“Although IBM noted increasing caution in discussions with European customers, all regions grew double-digit on a currency-neutral basis and demand was relatively flat across sectors,” Cross said. “IBM is primarily exposed to large companies and benefits from a consistent demand environment that doesn’t mimic flagging consumer sentiment,” she added.

IBM Price Action: Shares of IBM were up 4.67% at $128.23 at the time of Thursday’s publication.