) to outperform from neutral.
Analyst Andrew MuCullough cited the expectation for IBM's business model and earnings per share power to improve in 2006 from a combination of product cycle strength and restructuring benefits. He noted that mainframe cycle, full-year benefits of PC divestiture, and services restructuring are on deck. He expects the launch of IBM's most recent mainframe to drive renewed growth in IBM's most profitable hardware franchise beginning in the fourth quarter and extending through 2006, with positive feedback effects on the software business. He raised his $5.30 2006 earnings per share estimate to $5.50 and his $85 target to $95.