International Business Machines Corp (NYSE:IBM) is expected to report first-quarter results largely in line with forecasts on April 22, but Bank of America is adjusting estimates following the earlier-than-expected closing of its Confluent acquisition
The bank said it anticipates an “inline quarter,” with recently acquired Confluent contributing roughly $50 million in revenue during the period after the deal closed on March 17, about one quarter earlier than previously assumed.
Bank of America said IBM is likely to keep its full-year 2026 guidance unchanged, as management is expected to offset near-term dilution from the acquisition with a combination of additional revenue contribution and cost synergies.
Analysts lowered near-term earnings expectations to reflect the early Confluent close and a softer outlook for consulting growth, reducing its 2026 second-quarter EPS estimate by about $0.15.
It also trimmed full-year 2026 EPS estimates to $11.98 from $12.20, citing acquisition-related dilution and slightly weaker consulting trends.
Bank of America highlighted mixed segment performance expectations heading into the print. It sees Red Hat-driven revenue growth moderating to around 8% constant currency in the first quarter, while automation is expected to rise about 13%.
Data segment growth is expected to benefit from the Confluent deal, accelerating through the year, while consulting revenue is forecast to slip 1% in the first quarter before returning to modest growth in 2026.
For infrastructure, the bank expects a strong first quarter increase of roughly 24% driven by demand tied to IBM’s z17 cycle, but sees growth normalizing later in the year as comparisons become more difficult.
Analysts have a Buy rating on the stock, but trimmed their price objective to $300 from $340.