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Albrecht said the firm's trading revenues were hurt by lower activity levels, and new financial regulation "will likely weigh on this business".

The analyst lowered EPS estimates for 2010 to $14.55, from $15.04, and for 2011 to $17.64, from $17.80. He said the price target of 162 represents 1.2 times his projection for book value per share, "a steep discount to the stock's historical valuation".

International Business Machines: Kaufman Bros. equity analyst Karl Keirstead reaffirmed a hold rating and $135 price target on shares of International Business Machines (IBM) on July 20.

On July 19, IBM, the world's biggest computer-services company, missed analysts' revenue estimates and reported a drop in services-contract signings.

Revenue last quarter rose 2 percent to $23.7 billion, IBM said. Analysts on average estimated $24.2 billion, according to a Bloomberg survey. Currency fluctuations reduced sales by $500 million, the company said. Net income for the quarter climbed 9.4 percent to $3.39 billion, or $2.61 a share, topping analysts' average estimate of $2.58 a share.

Services-contract signings also declined 12 percent to $12.3 billion, the Armonk (N.Y.)-based company said—the second-straight quarterly decline in contracts for services.

IBM boosted its full-year profit forecast to at least $11.25 a share, missing analysts' average estimate of $11.28. The company had previously projected profit of at least $11.20.

Keirstead said in a note that IBM's lower-than-expected revenues for the quarter were due entirely to currency swings; the constant currency revenue growth rate of 2 percent was in line with his estimate. "[I]n our judgment, many investors were hoping for a stronger acceleration [in revenues] and more convincing signs that corporate IT spending was improving, he said. "Instead, the growth rate inched up from zero last quarter, to just 2 percent, despite a much easier year-over-year comparison, growth outside of the BRIC countries was zero, and IBM's guidance for 'an improvement' in the services and hardware units and 'similar growth' in the software unit did not hint at a meaningful recovery".

The analyst said that any expansion in the company's price-to-earnings multiple could be limited by the weak recovery trajectory in the services and software segments, by softness in Europe, and by uncertainty about recovery in IBM's hardware unit as the new z-series mainframe is introduced late in the 2010 third quarter.

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