IBM shares could easily rise above $120, financial newspaper Barron's said in its May 28 edition, citing the company's forecast for higher earnings per share due to software sales, stock buybacks, and growth in emerging markets.
IBM shares closed on Friday at $105.18. The company plans to bolster profits through higher-margin software sales, Barron's said. It also noted that IBM bought back $27 billion of stock between 2003 and 2006, and was authorised to buy another $16.4 billion.
The report also quoted an analyst as saying third world markets would become a growth engine for IBM in the future.
It said analysts' share price targets of around $120 to $125 "may ultimately look tame, given that IBM is expecting earnings gains to rise to 16 per cent a year."