J.P. Morgan analyst Mark Moskowitz this morning raised his estimates on IBM (IBM) ahead of the company’s Q3 financial results due after the close this afternoon.
Moskowitz also reiterated his Overweight rating on the stock, while lifting his price target to $150, from $144.50.
The analyst points out that the stock is up 10.7% over the last 60 days, but sees more upside ahead.� “Despite macro soft patches, enterprise spending on IT continues to improve,” he writes in a research note.
Moskowitz sees four factors driving the stock higher:
- increasing contribution to profit from software.
- “firming” services deal pipeline.
- recent refreshes of mainframe and Unix systems.
- less execution and M&A risk relative to peers.
The analyst now sees Q3 EPS of $2.78, up from $2.76; consensus is $2.75. For Q4, he goes to $4.05, from $3.96. For 2011, his new forecast is $12.71, up from $12.20.
IBM is up 94 cents, or 0.7%, to $142.
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