UBS analyst Munjal Shah downgraded IBM to Neutral from Buy with a price target of $140, down from $170.

The stock closed Friday down 17c to $134.09.

The analyst believes it will be difficult for the company to achieve sustainable mid-single-digit revenue growth. In 2020, pressure in the legacy businesses should somewhat offset the growth from year one of the mainframe cycle and Red Hat acquisition, Shah tells investors in a research note. The following year "should be even more challenging" with greater revenue pressure due to a tough year two mainframe compare and lower incremental Red Hat contribution adds the analyst.

Further, the currency remains a headwind and a lack of share buybacks will limit earnings growth outside of deleveraging, says Shah.