How Dow Collaboration Expansion and Share Buybacks Will Impact Kyndryl Holdings (KD) Investors

• Earlier this month, Dow announced an expanded collaboration with Kyndryl to modernize Dow's technology infrastructure using AI and automation, further deepening a nearly 20-year partnership.
• This expansion, alongside Kyndryl's recent turnaround to profitability, reinforced management's confidence, highlighted by a US$400 million increase in share buyback authorization.
• Now, we'll consider how the Dow collaboration and increased buybacks could reshape Kyndryl's growth and profitability outlook.

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Kyndryl Holdings Investment Narrative Recap

To own shares in Kyndryl, you need to believe the company can transform legacy IT contracts into higher-value services and grow profits amid slow revenue expansion. The expanded Dow partnership may support near-term catalyst confidence by strengthening consulting and AI-driven initiatives, but risks remain around legacy contract headwinds and revenue lumpiness. For now, the Dow news offers incremental support to the thesis, but does not meaningfully change the biggest risk: ongoing exposure to older, lower-margin contracts that could pressure margins if not replaced quickly.

One recent announcement worth highlighting is Kyndryl’s reaffirmed guidance for 1% constant-currency revenue growth for the fiscal year ending March 2026. This forecast, paired with new partnerships like the Dow expansion, keeps the spotlight on whether rising consulting and AI revenues can outpace the drag from declining legacy business and deliver the mix shift needed for profit expansion.

Yet, investors should be mindful that while new deals grab headlines, exposure to legacy contracts remains a material risk if revenue growth stalls and ...

Read the full narrative on Kyndryl Holdings (it's free!)

Kyndryl Holdings' narrative projects $16.7 billion revenue and $1.1 billion earnings by 2028. This requires 3.6% yearly revenue growth and a $803 million earnings increase from $297 million.

Uncover how Kyndryl Holdings' forecasts yield a $39.50 fair value, a 50% upside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community estimate Kyndryl’s fair value from US$26.06 to US$90.72 per share. With this broad diversity of views, remember revenue growth from new contracts is still critical for future stability and all opinions are worth comparing.

Explore 7 other fair value estimates on Kyndryl Holdings - why the stock might be worth just $26.06!

Build Your Own Kyndryl Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kyndryl Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Kyndryl Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kyndryl Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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