Jefferies Has Buy Rating On CA, Slaps $25 Price Target On Shares (CA)
Jefferies (NYSE: JEF) has reiterated its Buy rating on CA (NYSE: CA) with a price target of $25/share. CA is scheduled to report earnings on Wednesday, July 21 after the close of trading.
Analysts Katherine Egbert and Ignatius Njoku expect an in-line June quarter for CA. They also expect sequential margin improvement. They expect an operating margin of 30.8%, an improvement from previous quarter's 23%. Long-term, the company expects to exceed 34-35%. If things go smoothly, Jefferies expects management to continue making acquisitions of $300-500mm range in an attempt to become relevant in the cloud services space. Their first focus is on gaining share in the emerging service provider and private cloud market, which they estimate is a $4Bn opportunity. Jefferies also sees the valuation of the company as cheap, considering maintenance revenue makes up more than 90% of revenue, they think CA offers little downside risks for investors.
CA is currently trading at $19.25, up 1.32% on the day.
