Computer Associates (CA

) asked three executives to resign following an inquiry. SoundView cut its price target on the stock.

Analyst James Mendelson says the announcement that some revenue was improperly recognized in the fourth quarter and the resignations of three senior finance officers is a disturbing setback for CA. He cut his $36 price target to $32 to reflect a lower multiple given the uncertainty, since with added questions, he does not expect valuation discount to close as much or as quickly as previously thought. Mendelson maintains his outperform rating on the shares as the tone of CA's business continues to gradually improve. He believes CA is the beneficiary of ongoing consolidation of "platforms, people, and vendors". The analyst sees fiscal 2004 (ending March) earnings per share of 55 cents, rising to 61 cents in fiscal 2005.