Saturday, July 11, 2009

Reuters - Goldman raises US software sector to attractive

Goldman Sachs upgraded its coverage view on U.S. software sector to "attractive" from "neutral," saying the overall outlook for IT spending looked more encouraging.

Goldman, however, downgraded business software maker CA Inc (CA.O) to "neutral" and replaced it with SuccessFactors Inc (SFSF.O) on its "buy" list.

"CA historically has underperformed in a seasonal rally," the brokerage said. "In reviewing the software rallies from 2002 through 2007, CA underperformed the group in five out of six."

Goldman, which cut its price target on CA by $2 to $22, said currency remains a headwind for CA for the next few quarters, both from a revenue and earnings perspective.

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