IBM shares can easily climb over $120: Barron's

With its shares closing on Friday at $105.18, the company plans to bolster profits through higher-margin software sales.

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.

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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."