IBM upgraded by Barclays over new mainframes

Barclays Capital upgraded International Business Machines "overweight" from "equal-weight", saying the company's new mainframe computers will help it gain market share fromHewlett-Packard and Dell. 

IBM, the dominant provider of mainframe computers, or machines that run on powerful microprocessors of its own design, unveiled a new version of its iconic mainframe computer last week. 

"Earnings should benefit from a new mainframe cycle - shares have outperformed the market after each of the last three mainframes that were announced - and IBM announced its new mainframe earlier-than-expected just last week," Barclays' analyst Ben Reitzes wrote in a note to clients. 

IBM, considered a bellwether for the global enterprise IT sector, had said it spent more than $1 billion in developing the updated machines. 

Reitzes, who raised his target on the IBM to $240 from $208, sees the company's analytics strategy to drive higher margin revenue streams over the coming years. 

"IBM is one of the few companies in our sector that fits snugly in the third column of our tech investment strategy - called the "Apple-safe" column - where its revenue streams are not caught in Apple's disruptive crosshairs," Reitzes said.