Barclays Capital reported on Monday that it has cut its rating on International Business Machines Corp. (IBM).
The firm has downgraded IBM from “Overweight” to “Equal-Weight,” and has cut its price target from $215 to $190. This new price target suggests a 15% increase from the stock’s current price of $182.50.
An analyst from the firm noted: "It is increasingly clear to us that investors will evaluate IBM on cash flow more than earnings until revenue starts to grow meaningfully. As a result, we are moving our rating for IBM to Equal Weight from Overweight even though shares have been down over the past several months. The mainframe 'catalyst’ has passed and positive benefits from analytics seem to be offset by secular shits to SaaS and Cloud, which seem to adversely impact all of IBM’s segments in some way. We have recently performed several surveys that show the disruptive impact of cloud and SaaS are only in the early innings and are set to be more disruptive in 2014 for our whole sector."
IBM shares were down $1.70, or 0.92%, during Monday morning trading. The stock has been mostly flat YTD.