IBM could be one of the big turnaround stories of 2022. Barron’shighlighted the company’s improving outlook in a recent cover story, calling it “ Microsoft Jr.”
Under CEO Arvind Krishna, IBM (ticker: IBM) has spun off a pedestrian business of managing data centers into Kyndryl Holdings (KD), refocused on the cloud and artificial intelligence, and vowed to start growing again for the first time in about a decade.
Wall Street is skeptical about IBM’s prospects, but one bull, BofA Global Research’s Wamsi Mohan, has compared Krishna to Satya Nadella, the Microsoft CEO who transformed the company over the past seven years.
IBM, whose shares trade around $126, is valued at 11 times projected 2022 earnings. And it has the highest dividend yield in the Dow Jones Industrial Average, at 5.3%.
If Krishna is successful in boosting sales and margins while making IBM relevant again, there could be a lot of upside in a largely forgotten stock.
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