At least one Wall Street analyst has become more bullish about Red Hat in the wake of the open source software company’s better-than-expected fiscal third-quarter earnings.
Needham & Co. analyst Scott Zeller reiterated his “buy” rating and boosted his 12-month price target for Red Hat stock from $66 to $75.
Zeller wrote that Red Hat will benefit from increased spending on cloud software in 2015.
In addition, Cantor Fitzgerald analyst Brian White recently initiated coverage of Red Hat with a “buy” rating and a 12-month target price of $81.
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Red Hat shares closed Monday at $70.29, down 80 cents. Its shares have risen 25 percent this year.
Red Hat reported earlier this month that revenue in its fiscal third quarter rose a better-than-expected 15 percent to $456 million, and jumped 18 percent after adjusting for currency fluctuations. Net income of $70 million, or 42 cents per share, also bested expectations.
Zeller also wrote that he expects the transition to a new chief financial officer triggered by the upcoming retirement of long-time CFO Charlie Peters will be “seamless.” Peters, 63, has announced that he plans to retire within the next 12 months.
“Peters is well-liked by investors, yet we believe this retirement may have been anticipated, and the 12-month transition should offer comfort to investors,” Zeller wrote.