IBM (NYSE: IBM) materially lowered its guidance for 2015 EPS last quarter from $15.75-$16.50 to $14.75- $15.75 – with the lower bar, consensus Q4 EPS estimates seem achievable, and overall investor expectations are low, Bernstein's Toni Sacconaghi explains. Importantly, IBM may benefit from a material ($0.50+) discrete tax gain in the quarter which could distort headline reported EPS numbers.

However, investors' focus will likely be centered on FY 16 EPS guidance – Sacconaghi believes consensus estimates are significantly too high. He is at $13.94, vs. consensus at $15.02. The key question is whether IBM lowers the bar, or guides close to the range in the hope that the company's fortunes will improve in FY 16.

Sacconaghi forecasts 4Q15 EPS of $4.91 vs. consensus of $4.81 and implied guidance of $4.65 to $5.65. For FY16, we see EPS of $13.94 vs consensus of $15.02.

IBM reports after the bell today.