IBM (IBM) is set to report a solid start to the year, as RBC Capital Markets expects a Q1 top-line beat driven by strength in infrastructure and software, according to a Thursday report.

RBC models Q1 revenue of $15.57 billion and adjusted EPS of $1.80.

The firm said investor skepticism remains centered on growth in the consulting business, while software growth, particularly Red Hat, remains a focus area.

Red Hat growth is expected to remain in the high-single digits in Q1 after decelerating to 8% in Q4.

The firm also said investors will be watching for commentary on GenAI monetization and updated guidance following an earlier-than-expected close of the Confluent acquisition.

RBC maintained its outperform rating on IBM and lowered its price target to $330 from $361.

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