December 21, 2012 at 08:35 AM EST
Topeka Capital Initates Coverage on IBM at “Buy”; +26% Upside (IBM)

Topeka Capital analysts initiated coverage of International Business Machines Corp. (IBM) on Friday, starting the tech giant with a “Buy” rating.

The analysts value share of IBM at $245, about a +26% upside to Thursday’s closing price of $194.77

Topeka Capital commented, “Although we expect relatively modest IT spending growth in 2013, we believe IBM’s portfolio plays into the key secular IT trends such cloud computing, Big Data and the broader trend toward analytics with broader portfolio of solutions. Also, challenges at competitors such as Hewlett-Packard (HPQ-$14.43: Sell) may open up incremental opportunities for IBM next year. Given our view of the secular trends and changes in the IT world, we view IBM as a core holding for investors in the technology sector going into 2013.”

IBM shares were down $2.42, or -1.24%, in premarket trading on Friday. The stock is up +5.92% year-to-date.

The Bottom Line
Shares of IBM Corp (IBM) have a 1.75% dividend yield, based on last night’s closing stock price of $194.77. The stock has technical support in the $185-$189 price area. If the shares can firm up, we see overhead resistance around the $200-$201 price levels.

International Business Machines Corp. (IBM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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