UPDATE: Credit Suisse Reiterates Neutral Rating, Lowers PT on CA

In a report published Friday, Credit Suisse reiterated its Neutral rating on CA CA, but lowered its price target from $24.00 to $22.00. Credit Suisse noted, “CA reported lackluster September quarter results with revenue, EPS, deferred revenue, and cash flow below consensus estimates, primarily driven by disappointing new product sales and weakness in North America and Europe. Specifically, new products and capacity sales were down 25%, and given that new product sales in the mainframe segment grew 10%, new product sales in the enterprise solutions segment, which is the ‘growthier' segment of CA, declined meaningfully this quarter. Although management initiated sales coverage model changes and new customer segmentation efforts in recent quarters, the strategy has failed to gain traction in driving new products sales. Additionally, the ongoing macroeconomic uncertainty caused elongation of sales cycles and reduced deal sizes, further exacerbating the shortfall in new product sales. Furthermore, following two consecutive disappointing quarters coupled with macroeconomic concerns, management again lowered FY2013 guidance to $4.580-4.670 billion in revenue and EPS of $2.36-2.44 from $4.740-4.800 billion and $2.45-2.50, respectively.” CA closed on Thursday at $24.39.