IBM's shares will struggle as most of its profits are in a "likely irreversible structural decline," according to MoffettNathanson.

Analyst Lisa Ellis initiated the stock with a sell rating and a 12-month price target of $150 a share, which is about 2 percent below Wednesday's closing price of $153.22.

"We love this 100+ year-old American icon, and support management's turnaround strategy, but six+ years in, the company's recovery remains protracted and uncertain, with only ~25-30% of revenues in growth areas, and at least 1/3 of revenues – and a larger fraction of profits – in likely irreversible structural decline," Ellis wrote in a note to clients Thursday. "Even after shedding >$20B in revenues, we believe IBM will continue to struggle to return to growth."

Ellis noted that IBM's struggles will continue as most of its revenue still comes from areas with limited growth. The analyst estimated that only about 25 percent to 30 percent of IBM's revenue comes from growth businesses. "The 'growth scales' are still tipped heavily in the wrong direction for IBM," Ellis said. "Much of the rest of IBM's portfolio (we estimate ~$33B) is in structurally declining areas of Enterprise IT, so while the declines may be slowed, they cannot be reversed."

The company has been struggling to move away from its enterprise technology business as its main source of revenue. Its cloud business, meanwhile, is lagging that of competitors such as Amazon and Microsoft.

IBM shares are essentially flat for the year, while the S&P 500 tech sector is up nearly 20 percent and is the best performer of 2018.

To be sure, Ellis thinks IBM's management team is taking the necessary steps to turn around the company, but noted it is not a viable investment option at this point. "As much as we are rooting for this American icon, and believe the management team is taking the right steps to turn around the company, we see little upside to the stock over the next year," Ellis said.

IBM declined to comment.

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