CA shares retreat after Credit Suisse downgrade

Shares of CA Inc. dropped Monday after a Credit Suisse analyst downgraded the information technology management software company along with rival BMC Software Inc.

Analyst Philip Winslow downgraded both companies to "Neutral" from "Outperform." Winslow noted that their shares have outperformed the S&P 500 _ by 34 percent in the case of BMC and 9 percent in the case of CA since December 2007, when he recommended that investors buy them.

He now expects the stocks' further outperformance to be "more limited." CA, Winslow said, has reaped the benefits of the launch of IBM's Z10 mainframe in February 2008.

"However, we expect CA's relative strength in terms of revenue and free cash flow growth compared with the software industry to wane," he said. The analyst added that when excluding the effects of the weakening dollar, CA's revenue has decelerated in fiscal 2009.

Shares of Islandia, N.Y.-based CA fell $1.14, or 6.4 percent, to $16.81 in late morning trading. In the past 52 weeks, the stock has traded between $12 and $26.68.

Shares of Houston-based BMC lost 51 cents to $32.62.