international business machines corp shares fell tuesday after an analyst downgraded the stock on concerns about revenue growth following big blue’s spinoff of kyndryl holdings inc and ibm’s ability to compete in the cloud market ibm ibm shares fell more than 5 to an intraday low of 12797 tuesday morning before bouncing back a bit later in the session the dow jones industrial average djia  which counts ibm as a component was up 02 ubs analyst david vogt cut his neutral rating on the stock to a sell tuesday morning and lowered his price target to 124 from 136 because of nearterm risks to the company’s operating estimates lower earningspershare estimates “and an elevated valuation that leaves the shares vulnerable over the next 12 months” the analyst’s move follows the spinoff of ibm’s managed infrastructureservice business kyndryl kd  which began trading on the nyse on nov 4 “our detailed bottomup analysis of ibm’s remaining segments supports our view that roughly 50 of ibm’s topline is unlikely to grow longterm and could decline” vogt said vogt noted that public cloud a market where ibm hopes to find the growth many of its older businesses lack is dominated by companies like amazoncom inc amzn with aws and microsoft corp msft with azure while the market will continue to be one of the fastest growing it categories at about a 25 to 30 compound annual growth rate over the next five years ibm is unlikely to keep up with the competition’s growth red hat’s cloud business cagr is expected to be about 14 “in part reflecting ibm’s focus on large regulated enterprise workloads across industries like telecom utilities and financials as ibm’s presence in the platformasaservice and infrastructureasaservice market amounts to low singledigit share” he said “although red hat’s revenue contribution doubles in the portfolio and improves the longterm revenue trajectory we believe the market has already priced in that modest increase” the ubs analyst said for more ibm is still counting on red hat for growth vogt said he believes the market which is “underwriting” ibm forecast growth “despite a history of execution issues” is pricing 2022 and 2023 earningspershare estimates 10 higher than his own the street on average expects earnings of 1094 a share in 2022 and 1178 a share in 2023 according to factset data last earnings season analysts warned that the spinoff of kyndryl had the potential to make results “messy” and executives assured analysts that the transition would create a “slight pause” in business not the “disruption” that analysts feared ibm is scheduled to report fourthquarter earnings on jan 24 over the past 12 months ibm shares are up 7 compared with a 17 rise on the dow of the 19 analysts who cover ibm five have buy ratings 12 have hold ratings and two have sell ratings with an average price target of 14263 according to factset data