How To Play Four Top IT Hardware Names Pre-Earnings

In a report published Tuesday, RBC Capital Markets analyst Amit Daryanani offered a preview for four IT Hardware giants ahead of their respective earnings. According to Daryanani, 2015 has been a volatile year for the IT Hardware sector and the volatility will likely persist given sustained foreign exchange headwinds, a slowing PC market and accelerating cannibalization of the traditional storage market.

Daryanani is expecting

to continue outlining an "aggressive" shift towards a new business model with a focus on cloud and subscription revenue given the importance of this revenue stream for future growth. In the near-term, Daryanani noted that IBM's revenues and earnings per share will see material foreign exchange headwinds versus the Street's expectations. The analyst continued that for the March quarter, revenues should come in below expectations given an estimated foreign exchange headwind being 200 basis points higher than the company's guidance. Shares remain Sector Perform rated with a $160 price target.

According to Daryanani,

is an attractive mid-cap asset for investors as the company is expected to report results that are better than anticipated. Daryanani added that his checks show weakness in the sector is PC centric while retail has been "soft." However, Enterprise demand has remained healthy and will enable higher average selling prices and margins. In addition, the checks indicated stable pricing that should calm investor fears around price wars. Shares remain Outperform rated with an unchanged $116 price target.