Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Kyndryl Holdings, Inc. (KD), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank. Group 1: Brokerage Recommendations - Kyndryl Holdings, Inc. has an average brokerage recommendation (ABR) of 1.67, indicating a consensus between Strong Buy and Buy based on six brokerage firms' recommendations [2] - Out of the six recommendations, four are classified as Strong Buy, accounting for 66.7% of the total recommendations [2] - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation [5][11] Group 2: Analyst Bias and Zacks Rank - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, issuing five "Strong Buy" recommendations for every "Strong Sell" [6] - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which are more effective in predicting near-term stock price movements [8][12] - The Zacks Rank is distinct from the ABR, as it is a quantitative model that reflects timely earnings estimate revisions, while the ABR may not always be up-to-date [10][13] Group 3: Current Earnings Estimates for Kyndryl - The Zacks Consensus Estimate for Kyndryl Holdings, Inc. remains unchanged at $2.23 for the current year, indicating steady analyst views on the company's earnings prospects [14] - The unchanged consensus estimate has led to a Zacks Rank of 3 (Hold) for Kyndryl Holdings, suggesting caution despite the Buy-equivalent ABR [15]

Core Insights - Kyndryl has launched the Quantum Safe Assessment service to help organizations prepare for the security challenges posed by quantum computing, focusing on identifying cryptographic vulnerabilities and creating a roadmap for transitioning to quantum-safe security [1][2] Group 1: Service Overview - The Quantum Safe Assessment service evaluates an organization's entire IT environment to identify cryptographic risks and develop customized strategies for quantum-safe security [1][2] - The service includes creating a Cryptographic Bill of Materials (CBOM) to understand current encryption methods and their application across the enterprise [6] - It prioritizes critical systems and third-party interfaces at risk from quantum threats, such as payment gateways and cloud infrastructure, based on data sensitivity [2][6] Group 2: Strategic Importance - Kyndryl emphasizes that quantum computing security is a strategic imperative, as traditional encryption methods are increasingly vulnerable to quantum attacks, threatening data security and regulatory compliance [2] - The 2025 Kyndryl Readiness Report indicates a significant awareness gap, with only 4% of leaders recognizing quantum as a technology that will greatly impact their businesses in the next three years, highlighting the need for proactive measures [4] Group 3: Implementation Support - Kyndryl collaborates with organizations to define processes and adopt technologies for quantum-safe security, providing a step-by-step roadmap for implementation [3] - The service integrates quantum readiness with Kyndryl's Zero Trust Adoption Framework to enhance security across identity, endpoint, network, and data protection [6]

Core Viewpoint - Kyndryl Holdings, Inc is experiencing positive momentum following its transformation from IBM, with a Buy rating initiated by Guggenheim analyst Jonathan Lee, who has set a price target of $30 [1][2]. Group 1: Company Strategy and Performance - Kyndryl has implemented a "Triple A" framework focusing on Alliances, Advanced Delivery, and Accounts, which has improved contract-signing quality and operational automation [2][3]. - The company is transitioning from legacy IBM-related deals to partnerships with hyperscalers and technology vendors, enhancing its offerings in consulting, cloud-enabled managed services, cybersecurity, and data and AI solutions [3][4]. - Kyndryl aims to triple cash flow, double pretax earnings, and achieve single-digit revenue growth by 2028, with early results showing adjusted EBITDA margins increasing from 12% in 2022 to 16.7% in 2025 [4]. Group 2: Market Position and Growth Potential - Despite revenue pressures from traditional data centers, growth in cloud-based services is anticipated to offset declines, positioning Kyndryl favorably in the expanding IT infrastructure services market, projected to grow from $900 billion to $1.2 trillion by 2029 [5]. - Kyndryl's focus on contract economics has led to the exit or repricing of lower-quality engagements, thereby strengthening its portfolio and expanding margins [4][5]. Group 3: Financial Projections - Analyst Jonathan Lee projects third-quarter revenue of $3.93 billion and adjusted EPS of $0.85 for Kyndryl [6].

Core Insights - Kyndryl has launched new AI-powered services that enhance managed services delivery for IBM Z customers, combining mainframe expertise with agentic AI and hybrid IT capabilities to improve application development and operational agility [1][2][3] AI-Powered Services - The new agentic AI mainframe services are designed to help IBM z/OS customers adopt innovative technologies, facilitating faster decision-making and simplifying complex processes in application and infrastructure management [2][3] - Kyndryl's AI services integrate with the Kyndryl Bridge platform, providing intelligent automation, predictive analytics, and insights across mainframe infrastructure and applications [4][5] Collaboration and Expertise - Kyndryl collaborates with IBM to enhance AI capabilities in core business systems, enabling clients to leverage advanced AI on mainframes for improved decision-making and operational agility [5][6] - The company utilizes its intellectual property and expertise in mainframe transformation, along with technologies from cloud hyperscalers, to drive innovation for customers [6][7] Market Insights - According to Kyndryl's 2025 State of Mainframe Modernization Survey, 88% of respondents have implemented or plan to implement AI in their mainframe environments, with expected benefits including increased business agility (37%), faster operational actions (32%), and cost savings (31%) [8][9] - The survey predicts that AI will generate $12.7 billion in cost savings and $19.5 billion in increased revenues over the next three years, with key use cases in performance enhancement, fraud detection, and security [9]

Core Insights - Kyndryl Holdings Inc. is recognized as a potentially undervalued stock in the US market, particularly following its expanded collaboration with Dow [1][4] - The partnership aims to modernize Dow's infrastructure applications through AI and automation, enhancing operational agility and innovation [1][3] Group 1: Collaboration Details - The expanded agreement with Dow focuses on modernizing infrastructure applications, leveraging AI and automation [1][3] - This collaboration builds on a nearly 20-year relationship, during which Kyndryl has helped Dow improve operational efficiency globally [2][3] - Kyndryl provides a range of IT infrastructure services for Dow, including cloud, network, digital workplace, and security services [2] Group 2: Strategic Importance - The application modernization initiative is a significant step in Dow's digital transformation journey, as noted by Dow's IT Director [3] - The partnership is expected to enhance Dow's application landscape, integrating advanced technologies to drive efficiency [3]

Core Insights - The second quarter of fiscal year 2026 was anticipated to yield average financial results, with a notable market overreaction to a revenue decline [1] Financial Performance - Revenue drop in the second quarter was perceived negatively by the market, despite expectations of average performance [1]

Core Insights - Kyndryl has renewed its partnership with Vodafone Idea (Vi) for three years, focusing on transforming Vi's IT operations and enhancing cybersecurity measures [1][3] - The collaboration aims to implement a next-generation IT operations delivery model that emphasizes automation and data-driven insights, leading to improved service delivery and operational efficiency [2][4] Company Collaboration - Kyndryl will develop a cyber resilience framework for Vi, which includes security governance, zero-touch services, data protection, and incident recovery services [1][3] - The partnership will leverage Kyndryl Bridge, an AI-powered integration platform, which has already deployed over 1,000 automations at Vi, reducing delivery event noise by 15% [2][3] Strategic Objectives - The collaboration is designed to align Vi's IT strategy with its business objectives, maximizing returns on IT investments and accelerating the time-to-market for new digital services [4] - Kyndryl's expertise in managing mission-critical systems has been recognized by Vi, highlighting the importance of this partnership in driving business agility and operational efficiencies [3]

Summary of Kyndryl Holdings, Inc. Coverage Core Viewpoint - Kyndryl Holdings, Inc. (KD) has experienced a significant stock decline of 39% since June 30, 2025, primarily following the company's performance and market conditions [1]. Group 1: Stock Performance - The stock has plunged 39% since the last coverage on June 30, 2025 [1]. - The majority of losses occurred after the last analysis, indicating potential ongoing challenges for the company [1]. Group 2: Investment Strategy - The focus is on growth and momentum stocks that are reasonably priced and expected to outperform the market in the long term [1]. - The investment strategy emphasizes long-term quality stocks and the use of options for strategic positioning [1].

Industry Overview - The Chinese insurance market is projected to grow significantly, with its share of global premiums expected to rise from 11% in 2018 to 20% by 2029, surpassing the United States [1][6] - Key drivers of this growth include a strong economy, high levels of government spending, increased consumer awareness, and technological innovations [1][6] Major Companies - **Ping An Insurance (Group) of China Ltd.**: Founded in 1988, it is the largest insurance company in China with a market capitalization of approximately $118 billion as of July 2022 and net premiums written of $118.8 billion for 2020. The company employs 355,982 people and serves 227 million customers [3] - **China Life Insurance (Group) Company**: The second largest insurance company in China, with a market capitalization of about $103.9 billion and net premiums written of $111.2 billion for 2020. It operates a substantial service network and serves over 500 million customers [4][7] - **People's Insurance Company of China Group**: Established in 1949, it has net premiums written of $79.6 billion and a market cap of $226.6 billion as of July 2022. The company is involved in various insurance sectors including property and health insurance [8] - **China Pacific Insurance (Group) Company Ltd.**: An integrated insurance provider with net premiums written of $51.7 billion and a market capitalization of $233.37 billion as of July 2022. The company employs 107,000 people [9] - **New China Life Insurance**: Founded in 1996, it has a market cap of $80.8 billion and focuses primarily on life insurance while also expanding into investment and healthcare [10]

Core Insights - Kyndryl Holdings, Inc. reported mixed fiscal Q2 2026 results, with an EPS of $0.38 exceeding estimates by $0.02, but revenue of $3.72 billion falling short by $119 million [1][2] Financial Performance - The company experienced a 1.40% decrease in total revenue, attributed to longer sales cycles, despite key growth drivers such as Kyndryl Consult, which grew by 25% year-over-year, and Hyperscaler-related revenue, which doubled [2] - The book-to-bill ratio remains above 1, and management reaffirmed its fiscal 2026 outlook, anticipating revenue growth in the latter half of the year due to a stronger backlog [3] Analyst Ratings - Following the earnings release, Morgan Stanley reduced its price target from $30 to $28 while maintaining a Hold rating [4] - J.P. Morgan also lowered its price target from $45 to $40 but kept a Buy rating on the stock [4] Company Overview - Kyndryl Holdings, Inc. is based in New York City and specializes in designing, building, and managing critical technology systems for enterprises globally, with a focus on integrating AI-native automation into its IT modernization services [5]