Red Hat Stock Gets Upgrade - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Government // Enterprise Architecture
News
12/10/2010
11:19 AM
Connect Directly
Twitter
LinkedIn
RSS
E-Mail
50%
50%

Red Hat Stock Gets Upgrade

Analysts expect good things from the Linux developer due to its strength in renewing major contracts.

Red Hat's stock is rising, with several investment firms rating the company "overweight" after an RBC analyst upgraded its rating to "outperform" from "sector perform."

RBC analyst Matthew Hedberg on Wednesday advanced the company's stock, in part because of Red Hat's high success rate at renewing contracts. The developer's client list includes heavyweights such as Amazon.com, IBM, Nippon Telegraph & Telephone, and Qualcomm. In addition, Red Hat saw strong demand in the third quarter, with high renewal rates on large contracts, said Hedberg.

Red Hat's JBoss business, which provides virtualization management products, has been doing well, and the company is aggressively hiring, an indicator of strong demand, he added. In fact, Red Hat's third-quarter revenue could exceed RBC's current estimate of $227.1 million to $229 million, as well as Red Hat's own guidance for revenue between $226 million and $228 million, said Hedberg. Final results of the quarter are expected after the market closes on Dec. 21.

Equities research analysts at UBS AG increased their price target on shares of Red Hat from $44 to $50. Currently, there is a "buy" rating on the stock.

Likewise, Piper Jaffray upgraded shares of the company from a "neutral" to an "overweight" rating, and a price target of $50. Morgan Stanley this week also upgraded shares to "overweight," and created a $55 price target on the stock.

On Thursday, Red Hat was said to be considering offers from several cities and developers that were attempting to lure the Raleigh, N.C.-based developer from its current headquarters, according to Capitol Broadcasting. Currently, the company occupies two buildings that take up less than 200,000 square feet in the N.C. State's Centennial Campus, but Red Hat is said to be looking for up to 300,000 square feet of space.

One executive said to be very familiar with the situation in Raleigh said that a "number of cities" have made offers to Red Hat, according to the report. Red Hat CEO Jim Whitehurst declined to comment on the rumors.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
The State of Chatbots: Pandemic Edition
Jessica Davis, Senior Editor, Enterprise Apps,  9/10/2020
Commentary
Deloitte on Cloud, the Edge, and Enterprise Expectations
Joao-Pierre S. Ruth, Senior Writer,  9/14/2020
Slideshows
Data Science: How the Pandemic Has Affected 10 Popular Jobs
Cynthia Harvey, Freelance Journalist, InformationWeek,  9/9/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
IT Automation Transforms Network Management
In this special report we will examine the layers of automation and orchestration in IT operations, and how they can provide high availability and greater scale for modern applications and business demands.
Slideshows
Flash Poll