Zacks Investment Research downgraded shares of Compuware Corporation (CPWR) from OUTPERFORM to NEUTRAL on March 19, 2014, with a target price of $11.00.
Compuware reported mixed third-quarter results with earnings beating the Zacks Consensus Estimate while revenues missing the same. Management also slashed its revenue guidance primarily due to sluggish IT spending and challenges in Europe. We believe the ongoing restructuring plan will benefit the company's profitability, going forward. Moreover, the divestitures will help the company to focus on core business over the long run. Additionally, we believe Compuware's innovative product pipeline, initiatives to reduce costs and new program wins will boost profitability. However, overdependence on IBM for technology may rationalize growth prospects to a certain extent. Furthermore, the intensely competitive landscape compels us to downgrade our recommendation from Outperform to Neutral and set a price target of $11.00.
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