Citing valuation, Citi has cut IBM (IBM -0.7%) to Neutral ahead of the IT giant's Wednesday Q1 report. The firm's PT has been cut to $200 from $235.
IBM only goes for 11x 2014E EPS after handily underperforming the tech sector since last summer. But worries about the company's earnings quality (low tax rates have boosted EPS, and free cash flow has been deteriorating) and growth outlook remain high following a string of revenue misses.
Shares are modestly lower on a morning when equities are up slightly.