12:54 PM EST, 01/23/2025 (MT Newswires) -- IBM ( IBM ) will likely provide a bullish update at its Investor Day event in early February, overcoming foreign-currency headwinds and other challenges early in 2025, paving way for a strong year, analysts at BofA Securities said Thursday.

The analysts said while IBM's ( IBM ) Q4 results, due out Jan. 29, may narrowly lag consensus estimates, its performance should improve during 2025, supported by 7% year-over-year growth for its software segment and a rebound for its consulting and infrastructure divisions during H2 2025.

IBM's ( IBM ) consulting business likely was hampered by a pullback in discretionary spending late in 2024, according to BofA analysts, who are forecasting a 2% decline in Q4 revenue from the segment and a 1% drop during Q1 2025. They expect a turn-around by mid-year, bolstered by a backlog of conversions for generative artificial intelligence, potential M&A and a recovery in discretionary spending.

Infrastructure revenue similarly will see an H2 rebound, with a 6% year-over-year increase in 2025 as customers begin to replace existing mainframe systems with the new Z17 architecture.

BofA analysts increased their price objective for IBM ( IBM ) to $260 from $250 and reiterated their buy rating.

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