Jefferies announced on Friday that it had initiated coverage of IBM shares with a 'hold' recommendation and a price target of $180.

In a research note, the analyst says he appreciates the strategic shift undertaken by the IT group, which has enabled it to position itself as a leader in the hybrid multi-cloud market.

The intermediary points out, however, that its software activities tend to grow at a slower pace than those of its competitors, with profit margins also below those of its rivals.

While Jefferies sees potential for improvement in this area from a long-term perspective, it does not foresee any catalysts in the immediate future, which leads it to expect a limited rise in the share price in the absence of significant progress.

The professional adds that the share is currently trading at 15 times earnings, compared with an average of 26 times for the software sector, but rules out any significant expansion of this valuation multiple.

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