Benzinga·2025-11-28 18:09Core 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].