IBM gains on upbeat comments
By Matt Andrejczak, MarketWatch
Last Update: 2:01 PM ET Aug. 19, 2005
SAN FRANCISCO (MarketWatch) - International Business Machines Corp. gained more than 2% midday Friday, boosted by analyst comments that say IBM should benefit from internal moves and strength in the storage and server markets.
"We continue to believe there are a number of important catalysts on the horizon for IBM, which should reinvigorate investors in the stock during the seasonally strong back half of the year," Prudential Equity Group analysts said in a research note.
Shares of IBM (IBM: news, chart, profile) rose $1.80 to $82.95.
Big Blue is showing improvement after a few mishaps earlier this year jolted investors. Prudential analysts cited IBM's reduced headcount, a reorganization of its services business, a new mainframe cycle and new server products.
Chief executive officer Samuel Palmisano has slashed jobs and shed less-profitable hardware units to focus on software sales and global services. IBM also ditched its struggling personal-computer division, selling it to Chinese computer maker Levano Group Ltd. last April.
Prudential says it favors IBM over Hewlett-Packard Co. (HPQ: news, chart, profile) at this time, saying it prefers to place its bets on the "proven leadership" team at IBM.
H-P, the printer and computer giant, is in the initial stages of a restructuring under CEO Mark Hurd.
The firm has a buy rating on IBM and a neutral rating on H-P.
Matt Andrejczak is a reporter for MarketWatch in San Francisco.
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