Kathryn Huberty, a leading Wall Street analyst has downgraded IBM to Equal-Weight and has also brought the price target down to USD 155. Prior to this downgrade, IBM was rated as an Overweight with a price target of USD 170. The proprietary survey from Morgan Stanley indicate that the IT budget growth is on a downslide in 2020, and as a result the enterprise hardware companies have to suffer the most.
Huberty’s estimate state a negative 1.6 per cent growth reducing from her previous 1 per cent positive growth for the company’s 2020 revenues. The analyst claims that there are new solid evidences of the company losing revenue from its core sector and is also set to lose its market share in software and services. IBM’s increased interest in cloud was touted as a positive, but despite its new acquisition of Red Hat, the company has failed to establish itself in the cloud computing sector. She stated that the company requires to restructure its portfolio if it wants to keep the chances of long-time revenue growth alive. Morgan Stanley slashed its estimate for IBM in 2020 to USD 12.80 per share from a previous estimate of USD 13 per share. The cut down on estimate from Morgan Stanley meant that IBM stocks were trading 0.13 per cent down at USD 137.80 on Friday.
Talking of Morgan Stanley,the company is taking some strong steps to proceed towards its goal of acquiring over one million wealth management clients in the next five year period. Morgan Stanley had acquired Solium for USD 900 million and are hoping to utilize it for “capturing new clients and assets”. Solium, now renamed to Shareworks, stands as the core of suite designed by Morgan Stanley to help companies help its employees with finances.
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