JPMorgan Gives Insight Into CA Technologies' Growth, Initiates At Neutral

In a report published Wednesday, analysts at JP Morgan initiate coverage of

with a Neutral rating and price target of $31. Although the company's CEO has made several changes to improve operations, they have not yet led to any significant revenue growth or margin expansion. "We believe current holders looking for stable returns supported by one of the highest dividends in all of technology stocks should continue to hold shares with potential upside from demonstrated operational improvement but putting new money to work in CA is not recommended at this time," the analysts stated. Although the company generates more than 80 percent of its cash flow from its mainframe business, the limited growth prospects in this segment have impacted the CA's overall growth rate. Although CEO Mike Gregoire has successfully realigned the business from a sales and product perspective, while also building a strong management team, CA is unlikely to see enough new organic sales growth for significantly impact its 2015 revenues.