International Business Machines (IBM) would likely maintain its guidance for 2024 if the strength of the signings momentum continues for the company, BofA Securities said in a note Monday.
The firm also expects IBM to guide revenue relatively in-line for Q2.
“Heading into earnings we remain most concerned about continuing softness in consulting,” BofA said.
The bottomline of IBM, which is set to release Q1 results after market close Wednesday, can be helped by gain on the sale of Weather assets, “offset somewhat by restructuring charges,” BofA said.
For 2024, the firm said that it continues to expect free cash flow of about $12 billion for IBM “on higher profitability, lower cash requirement given changes to retirement plans, offset by higher [capital expenditures] and cash taxes.”
BofA maintained IBM’s buy rating and $220 price objective.