International Business Machines (IBM) could "modestly beat" Q1 consensus estimates and raise its 2025 revenue guidance, Oppenheimer said in a Thursday note ahead of the company's earnings report on April 23.

Red Hat should see solid adoption and the OpenShift enterprise application platform should have particularly high usage in Q1, Oppenheimer analysts said. Further, the company's recent price hikes across its software portfolio should drive revenue higher in the quarter and throughout the year, the analysts said, adding that they have confidence projecting a 10% or higher organic growth in 2026-2027.

However, cuts stemming from Department of Government Efficiency scrutiny of federal contracts could negatively impact the company's organic growth expectations, the analysts said. IBM's recent acquisition of DataStax and Hakkoda should add approximately 50 basis points to its full-year revenue, they added.

Further, the analysts said a major swing to the US dollar should be a tailwind to the company's results.

Oppenheimer's rating on the company's stock is outperform with a price target of $320.

Price: 240.47, Change: +1.90, Percent Change: +0.80