IBM: Barclays Ups Rating; Says Big Blue's Biz Is 'Apple Safe'

IBM shares are getting a boost this morning from Barclays Capital analyst Ben Reitzes, who upped his rating on the stock to Overweight, from Equal Weight. His price target is now $240, up from $208.

Reitzes offered for reasons for his more bullish stance:

• EPS should benefit from a new mainframe cycle.
• He thinks IBM "will continue to out-execute competitors like HP and Dell, allowing it to gain share."
• Over the next several years, he says, IBM’s analytics strategy should be "a key driver of higher margin revenue streams."
• "IBM is one of the few companies in our sector that fits snugly in the third column of our tech investment strategy – called the 'Apple-safe' column – where its revenue streams are not caught in Apple’s disruptive crosshairs."

IBM, he adds, may show more EPS upside in the December 2012 and March and June 2013 quarters than it will in September given product transitions.

"While we realize that macro factors are an issue, currency may not be as big a headwind as once thought and IBM’s mainframe cycles tend to be quite company-specific and new features should appeal to existing customers in developed markets and new ones in emerging markets like China," he writes. "Additionally, we view IBM as a solid defensive play in the group with less downside risk given its shareholder return strategy."

For 2012, Reitzes inched up his EPS forecast to $15.18 a share, from $15.15; for Q3, he actually drops a penny to $3.62, from $3.63. For 2013, he goes to $16.75, from $16.65. For 2014, he now sees $18.45, up from $18.31.

IBM is up $1.24, or 0.6%, to $196.09.