UBS: Expect 'Mediocre' Q1 From IBM

In a report published Tuesday, UBS analysts maintain their Neutral rating on

, as well as the price target of $160. The company is expected to report its 1Q earnings on April 20, 2015, which the analyst expect to be "mediocre." UBS has revised its full year non-GAAP EPS estimate down 3 percent to $16, based on the sales estimate being revised down 9 percent to $84.4 billion. The estimates were revised due to the worsening currency situation since late February. The analysts expect the company's top-line to decline by nearly 8 points due to currency movements. In addition, while IBM began shipping its z13 mainframe in mid-March, the impact on revenue will be seen more in 2Q than in 1Q. The analysts expect growth in Hardware through the year, as compared to 2013-2014, with a $700 million rise in revenues in 2015. "We are not in the ultra-bearish camp, but it seems early in the transformation to forecast much recovery with currency and emerging markets still drags. Strategic imperative revenue probably does not cross over legacy revenue until 2017," the analysts added.