Lehman Upgrades IBM to Buy

Analyst Daniel Niles cited the strength of Big Blue's revenues in an economic down-cycle

Shares of IBM (IBM ) were higher after Lehman Brothers raised the stock to buy. Analyst Daniel Niles says his upgrade is based on the strength of annuity-based revenues in an economic down cycle, and the company's strong competitive positioning when the market does enter an economic up cycle.

Niles also notes IBM's end-to-end integrated solution model still is very successful, placing the company into leadership positions in almost all its markets. He adds the tough economic climate is driving a major shift to outsourcing, especially overseas where IBM is very strong. The company also is able to leverage large product portfolio by bundling products and services together. Simplicity of dealing with one vendor, price advantage makes IBM vendor-of-choice. Niles set a $140 price target for the stock.

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