Benzinga | Oct 1, 2021 07:47AM EDT

Jefferies Initiates IBM With Buy Rating - Read Why

* Jefferies analyst Kyle McNealy initiated coverage of International Business Machines Corp (NYSE:IBM) with a Buy rating and $170 price target, implying a 22.5% upside.

* McNealy notes that IBM is at "convergence of many favorable high-growth industry trends" in enterprise technology, with exposures to software, cloud services, security, data, and artificial intelligence.

* McNealy says IBM's 2019 acquisition of Red Hat and planned year-end spin of Kyndryl are a "necessary push in the right direction."

* He believes the Street underappreciates the company's growth prospects.

* Price Action: IBM shares traded higher by 0.77% at $140 in the premarket session on the last check Friday.