Morgan Stanley Upgrades Red Hat to “Overweight” (RHT)
Red Hat (NYSE:RHT) was upgraded by Morgan Stanley from an “equal weight” rating to an “overweight” rating in a research note issued on Monday, American Banking News.com reports. The firm currently has a $69.00 target price on the stock. Morgan Stanley’s price objective would suggest a potential upside of 19.87% from the stock’s previous close.
The analysts wrote, “1) stronger growth in the renewal base, 2) improving data points from partners and customers, as indicated by a recent customer survey, 3) non-RHEL products sustaining growth at scale and 4) a reduced potential threat from public cloud workloads.” Morgan Stanley added that conversations with Red Hat partners were the “most encouraging” in years with stronger CY14 growth, complemented by a record 3:1 ratio of resellers beating plans. Weiss reported, “This sentiment was echoed by customers, as they recently indicated intentions for a 2.8:1 up-to-down spending increase on Red Hat in CY14, the highest level in almost three years. We see a more complete and mature middleware portfolio as one driver of this dynamic, in addition to measured progress with Storage as Red Hat takes the reins off, resulting in a 7-figure deal in 2Q, while lastly, our survey work points to OpenShift adoption doubling in CY14 from 8% to 16% penetration.”
Red Hat (NYSE:RHT) traded up 1.32% on Monday, hitting $57.56. 3,156,023 shares of the company’s stock traded hands. Red Hat has a one year low of $41.89 and a one year high of $59.71. The stock has a 50-day moving average of $51.29 and a 200-day moving average of $48.99. The company has a market cap of $10.910 billion and a price-to-earnings ratio of 62.43.
Red Hat (NYSE:RHT) last announced its earnings results on Thursday, December 19th. The company reported $0.42 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.35 by $0.07. The company had revenue of $397.00 million for the quarter, compared to the consensus estimate of $383.13 million. During the same quarter last year, the company posted $0.29 earnings per share. Red Hat’s revenue was up 15.4% compared to the same quarter last year. On average, analysts predict that Red Hat will post $1.47 earnings per share for the current fiscal year.
A number of other analysts have also recently weighed in on RHT. Analysts at Jefferson Research downgraded shares of Red Hat from a “buy” rating to a “hold” rating in a research note to investors on Friday. Separately, analysts at Zacks upgraded shares of Red Hat from a “neutral” rating to an “outperform” rating in a research note to investors on Wednesday, December 25th. They now have a $59.10 price target on the stock. Finally, analysts at Credit Agricole raised their price target on shares of Red Hat from $53.00 to $63.00 in a research note to investors on Friday, December 20th. They now have a “buy” rating on the stock. One equities research analyst has rated the stock with a sell rating, nine have given a hold rating and nineteen have issued a buy rating to the company’s stock. The stock has a consensus rating of “Buy” and a consensus target price of $58.28.
Red Hat, Inc (NYSE:RHT) is engaged in providing open source software solutions to the enterprise, including its Red Hat Enterprise Linux and JBoss Enterprise Middleware.
Get Analysts' Upgrades and Downgrades via Email - Stay on top of analysts' coverage with Analyst Ratings Network's FREE daily email newsletter that provides a concise list of analysts' upgrades and downgrades. Click here to register now.