Ahead of the Bell: CA upgraded on new technologies

AP News
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Posted: Dec 09, 2009 8:52 AM

A Deutsche Bank analyst upgraded CA Inc. Wednesday, saying the business software company is poised to benefit from opportunities in the new technologies of virtualization and cloud computing.

Virtualization helps companies save money on power and equipment by enabling a single computer to function like multiple machines. Cloud computing is centered on the idea of running software from remotely hosted computers rather than on the user's own machine.

Analyst Todd Raker raised his rating to "Buy" from "Hold" and increased his target price on the company's shares to $28 from $22. Shares of CA finished Tuesday's trading at $21.91.

Raker said that as cloud computing starts to see "significant adoption" by businesses, managing how it is used will become increasingly important. Cloud computing leads to increased service and elevated security requirements for the companies that use them, and CA's "product portfolio is well positioned to benefit," the analyst said.

"We think the Street does not fully appreciate the virtualization/cloud computing management opportunity," Raker added.

In premarket activity, CA shares added 79 cents, or 3.6 percent, to $22.70.