In a note published Friday morning, Bank of America analyst Wamsi Mohan reinstated coverage of International Business Machines Corp. (NYSE: IBM) with a Neutral rating and a price objective of $200.

Mohan commented, "IBM's strategy of embracing the changes in IT to a more "on demand" model is strategically sound but creates near term headwinds to legacy businesses."

He added the firm views IBM as a long-term winner, but remains cautious on the reset of FX estimates and expectations for a "steep ramp" in the second half of 2014.

Looking to the IBM's research, Mohan noted the company is driving innovation in Cloud, Social, Mobile and Big Data/Analytics, which he views as secular trends that will gain a higher share of IT spend.

Shares of IBM were up about 1 percent in the pre-market session.

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