Jefferies & Company Rates CA Technologies (CA) A Buy

Jefferies & Company analysts Katherine Egbert and Ignatius Njoku reiterated their Buy rating for shares of CA Inc.

, with a price target of $25 per share. They noted that CA Inc is changing its name to CA Technologies. The analysts recently attended the CA Technologies analyst day in Las Vegas and the event provided them insight into the company's business model. The analysts said that they expect CA Technologies Inc to continue to invest $300 million to $500 million per year in acquisitions but that future acquisitions should cause less dilution. The Jefferies & Company analysts wrote, "our $25 price target is 10x EV/CY10 FCF/share of $2.29 plus $2.02 in cash. 10x equates to a 10% FCF yield, a contracted multiple from previous, and the bottom of the historic range for the group. Risks include CEO turnover and a change to a more aggressive stance in virtualization management, slow/no growth in the core network and systems management market, a history of restructurings, a high likelihood of further dilutive M&A, and opaque revenue and bookings."