KD - Susquehanna says Kyndryl's bull case is 'degrees of freedom' after leaving IBM nest

• Investment firm Susquehanna started coverage on Kyndryl ( NYSE: KD ) on Thursday, noting that aside from its cheap valuation, the bull case for the stock is the fact it left the overhang of IBM ( NYSE: IBM ).
• Analyst James Friedman started coverage on Kyndryl ( KD ) with a neutral rating and a per-share price target of $14, noting that the spin-off can move into larger markets now that it is no longer bound by its former parent.
• "In that vein, Kyndryl has been quick to sign major partnerships with AWS, Microsoft Azure, and Google Cloud, quickly commercializing its arsenal," Friedman wrote in a note to clients. "Simultaneously, the company is re-training its ~90,000 employees to shift away from a mainframe focus to harvest the secular growth in cloud services."
• Fridman added that the current valuation for Kyndyl ( KD ) also makes the stock "compelling" at current levels.
• Conversely, Friedman said that Kyndyl ( KD ) while is "off to a good start" since leaving IBM ( IBM ), declining revenues because of customer losses and an accelerating trend of cloud migration from mainframe pose headwinds and obstacles for the company.
• Last month, J.P. Morgan tweaked its estimates on Kyndyl ( KD ) due to likely uncertainty in the IT and BPO spaces in 2023 .

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