Citi Downgrades CA After Head-To-Head Battle With Symantec

In a report published Monday, Citi analyst Walter H Pritchard downgraded the rating on

to Sell, while reducing the price target to $28. Both CA and

are restructuring and capital return stories, although they are perpetually in the middle of a turnaround. Analyst Walter H Pritchard adds that Symantec comes out as "the clear winner" in a value based fight. "We see more room for upside to revenue at Symantec driven by execution improvements post business split while recent evidence points to further backlog deterioration at CA. On the profit front, CA has just committed to higher margins, & we see more room for unanticipated margin upside at SYMC," analyst Walter H Pritchard said. Although CA's mature mainframe business appears to be more stable than Symantec's Norton, there seems to be greater upside for the latter's growth businesses. Taking into account Revenue, Cost Set-up, Mature Markets and Growth Markets, Citi mentions that the score is: CA 1, Symantec 3. "Both companies could return more capital, with SYMC the more likely. Both companies are in the higher end of valuation ranges, but SYMC is at low end of dividend yield & CA at high end. SOTP math suggests more upside for SYMC ($29) vs. CA's $28 SOTP," Pritchard wrote. Taking into account Capital Return, Valuation & SOTP, Citi mentions the final score as: CA 1, Symantec 6