IBM (IBM) Downgraded on Growth Challenges

With the share price of IBM (NYSE:IBM) having the potential to reach levels which would be highest in 15 years when measured against the overall tech sector Sanford Bernstein analyst Toni Sacconaghi cut his rating on the company from "Outperform" to "Market Perform."

He said at his price target ($173), the shares of IBM would be at their "highest level versus the technology sector in over 15 years.”

Sacconaghi added that, "In Q4, IBM reported record signings of $22.1B, up 18% YoY and well above consensus estimates of $18B-$19B. While we are encouraged by IBM’s strong signings, IBM did benefit from three very large deals during the quarter, including its first $1B+ signings since Q406. Longer- term, we remain cautious about the secular attractiveness and sustainable growth rate of outsourcing, and note that revenue growth over the last 4 years have been very modest among major domestic players."

IBM was trading at $153.62, falling $5.40, or 3.40 percent, as of 12:25 PM EDT.