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IBM's Q1 Results Largely In Line With Expectations, Morgan Stanley Says

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IBM's (IBM) Q1 results were largely in line with expectations and do not alter the narrative on the company, Morgan Stanley said in a Thursday note.

The brokerage said that in the Middle East, IBM recorded its strongest growth in decades in Q1, with no slowdown in demand or pipeline trends.

Morgan Stanley said, however, that it's still early in the year, IBM rarely adjusts its full-year guidance in Q1, and a prolonged stalemate in the Middle East conflict could start to impact growth in Europe "in the coming weeks".

Analysts said they were encouraged by the acceleration in IBM's Red Hat subsidiary, despite Red Hat Enterprise Linux decelerating.

Analysts said that in Q1, IBM's Software business modestly underperformed expectations, Consulting was in line, and Infrastructure beat estimates.

Morgan Stanley retained an equalweight rating on the stock and increased its price target to $225 from $215.

Price: $228.76, Change: $-23.11, Percent Change: -9.17%

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