IBM rises as MoffettNathanson upgrades, citing potential growth IT services
David Ramos


IBM (NYSE:IBM) shares rose in early trading on Thursday after MoffettNathanson upgraded the IT giant, stating there is the potential for strong IT services growth this year.
Analyst Lisa Ellis raised her rating on IBM (IBM) to market perform from underperform after a survey showed there is likely going to be "continued strong demand for IT Services in 2023, despite â and in some cases even because of â recession concerns.

Ellis also noted that there are signs of positive progress of a turnaround at IBM (IBM), as the belief is now that the company "can grow revenues on a sustained basis."
She also said companies like IBM (IBM) and Accenture (ACN) that are well positioned in digital transformation and the cloud have "consistently outperformed expectations."
Conversely, Ellis also downgraded Cognizant Technology Solutions (CTSH) and DXC Technology (DXC) to underperform from market perform for the same reason, as both companies have struggled in the transition to digital transformation and the cloud.
Last month, IBM (IBM) and Rapidus partnered to build semiconductor technology and a related ecosystem in Japan.
Analysts are mostly cautious on IBM (IBM). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates IBM a HOLD.