Wu initiated a “buy” rating on the stock and a price target of $230 per share, which he said was based on a 13½ multiple of calendar 2013 EPS at $17.
IBM shares closed at $193.35 per share, up 0.3 percent.
Although 58 percent of IBM’s revenue comes from outside the United States, Wu sounded bullish on the company’s prospects abroad.
“Asia is slowing down but still growing faster than rest of the world,” he said. “We actually see Asia as a whole as a high-growth market.”
Wu said he preferred IBM, which has expanded from hardware to software, over a company like Oracle, which has moved in the opposite direction.
But from Wu’s perspective, it was a focus on customer service that set IBM apart from its competitors, much like Apple.
“IBM is one of the few companies, in our view, that really understands that for the enterprise space,” he said.
Joe Terranova of Virtus Investment Partners said he has been long IBM for two years and would trim his position were the stock to fall below $180 per share.
“I think if you’re in tech, IBM is the place to be,” Steve Cortes of Veracruz said.
Patty Edwards of Trutina Financial was pickier.
“It’s not revenue-driven earnings growth. I’ve got a problem with that. I’d rather be in something like Qualcomm,” she said.
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Trader disclosure: On Feb. 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long IBM; Terranova is long EMC; Terranova is long AXP; Terranova is long AAPL; Terranova is long TRLG; Terranova is long JOY; Terranova is long SNDK; Terranova is long MCD; Terranova is long MA; Terranova is long OXY; Terranova is long SU; Terranova is long CNX; Terranova is long CSCO; Terranova is long SBUX; Terranova is long FXE; Terranova is long TBT; Cortes is long MO; Cortes is long SO; Cortes is long Treasuries; Cortes is short SINA; Cortes is short BAC; Cortes is short Silver;
For Patty Edwards
Trutina Financial is long AAPL
Trutina Financial is long GLD
Trutina Financial is long INTC
Trutina Financial is long CME
Trutina Financial is long QCOM
Trutina Financial is long DIS
Trutina Financial is long YUM
For Andy Busch
For Gina Sanchez
For Jason Bazinet
Gregory Hertz, CFA, CPA, Associate, holds a long position in the securities of Walt Disney Co.
A member of the household of Tobias M Levkovich, Strategist, holds a long position in the securities of Walt Disney Co.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Walt Disney Co.
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Walt Disney Co.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Walt Disney Co in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Walt Disney Co.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Walt Disney Co.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Walt Disney Co.
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.
For Shaw Wu
Sterne Agee makes a market in shares of (AAPL), (CSCO), (DELL), (EMC), (HPQ), (IBM), INTC)
For Brian Bedell (MP)
(SCHW): Neither ISI nor its affiliates beneficially own 1% or more of any class of common equity securities of the subject companies referenced in the Report. No person(s) responsible for preparing this Report or a member of his/her household serve as an officer, director or advisory board member of any of the subject companies. No person(s) preparing this report or a member of his/her household have a financial interest in the subject companies of this Report. At various times, the employees and owners of ISI, other than those preparing this Report, may transact in the securities discussed in this Report. Neither ISI nor its affiliates have any investment banking or market making operations. No person(s) preparing this research Report has received non-investment banking compensation form the subject company in the past 12 months.
ISI does and seeks to do business with companies covered in this research Report and has received non-investment banking compensation in the past 12 months.