Goldman Sachs maintained a Neutral rating on IBM (NYSE: IBM) and trimmed its price target to $173.00 (from $175.00). The change follows Q1 results.

Analyst Bill Shope said "All things considered, comparable EPS of $2.45 was below our estimate and consensus. IBM now expects its full-year 2014 tax rate to be 20%, down from 23% previously. This adjustment would have resulted in an approximate $0.70 benefit, all other things held equal, but instead IBM reiterated its 2014 operating EPS guidance of "at least $18.00". As such, above-the-line expectations appear to have been scaled back significantly. We had estimated EPS of $17.54, vs. consensus of $17.84."

"This incremental weakness appears to reflect further weakness in growth markets (Asia-Pac) and increasing competition in application outsourcing. Although we are raising our operating EPS estimates, this is largely the result of a lower tax rate and lower full-year share count, while our fundamental assumptions have been ratcheted downward and this passes through to our 2015 earnings reductions (where we assume the tax rate is still 23%). We now forecast 2014 revenues of $97.46 billion and operating EPS of $17.69, from $98.58 billion and $17.54 previously. We also lower our 2015 and 2016 revenues and EPS estimates by 1% to 2%," he added.

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Shares of IBM closed at $196.40 yesterday.