International Business Machines Corp. (NYSE: IBM) reported third-quarter financial results after markets closed on Monday. At first glance earnings look good, beating estimates on the top and bottom lines. However, this was not enough to drive the stock higher, and many analysts soured on this report, cutting their targets.

24/7 Wall St. has included some highlights from the earnings report, as well as what analysts are saying after the fact.

The company reported that it had $3.29 in earnings per share (EPS) and $19.23 billion in revenue. The consensus estimates from Thomson Reuters had called for $3.24 in EPS on revenue of $19.00 billion. In the third quarter of last year, the company posted EPS of $3.34 and $19.28 billion in revenue.

For all of 2016, IBM continues to expect EPS of at least $13.50, which compares to the consensus estimates calling for $13.51 in EPS on $79.59 billion in revenue for the full year.

Greg McDowell of JMP Securities commented on Big Blue:

We maintain our Market Outperform rating on International Business Machines (IBM) and lower our price target to $169 from $172 after the company reported. … While there are multiple puts and takes in analyzing the quarter, ultimately IBM continues to deliver EPS upside for investors, 3Q16 was the third quarter in a row of a revenue beat, we like the progress IBM is making with its transformation, and with the stock trading at a 2017 P/E multiple of 11x and offering a 3.7% dividend yield, we still think it represents a compelling risk/reward trade-off.

Merrill Lynch reiterated a Neutral rating with a $170 price objective and lowered earnings and revenue estimates mildly. The firm feels that the debate will swirl around 2017 as higher tax headwinds and a challenging margin trajectory dominate. Its investment rationale said:

We view IBM as a defensive investment given its high exposure to recurring sales, cost cutting levers, solid balance sheet, potential share gains, and relatively stable margins. We believe IBM is going to embark on further cost cutting, and enhance its services and software offerings through acquisitions. Longer term, we view IBM as a share winner in the IT spending market. That said, we remain cautious near term on reset of estimates for opex investments, FX and divestitures.

Credit Suisse has an Underperform rating with a $110 price target. The firm found the third-quarter underlying profit strength disappointing. As a result, the firm lowered estimates. At first glance these results were better than expectations with revenues coming in at $19.2 billion, down only 0.3% year over year (the firm believes this could have been helped by as much as $350 million from M&A) and EPS at $3.29, which was also above consensus, but below Credit Suisse’s expectations. The results were again helped by non-operational measures, which the firm finds concerning. Ultimately Credit Suisse believes the secular and structural challenges facing IBM remain, and specifically the analyst sees limited improvement in Services and Software margins.

A few other analysts weighed in on IBM as well:

• Barclays has an Underweight rating and cut its price target to $135 from $140.
• Goldman Sachs has a Neutral rating and lowered its price target to $145 from $147.
• Citigroup maintained a Neutral rating with a $160 price target.
• Morgan Stanley maintained an Overweight rating but cut its target to $179 from $182.
• JPMorgan has a Neutral rating and cut the price target from $177 to $173.
• Jefferies reiterated a Sell rating.

Shares of Big Blue were trading down over 4% at $148.27 on Tuesday, with a consensus analyst price target of $154.12 and a 52-week trading range of $116.90 to $165.00.

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