Buy Red Hat (RHT) on Any Weakness into Analyst Meeting - Citi

June 21, 2012 7:30 AM EDT Send to a Friend
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Price: $62.25 -0.86%

Rating Summary:
    22 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 18 | New: 41
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After the market closed Wednesday, enterprise software provider Red Hat (NYSE: RHT) reported first-quarter numbers, showing a beat on the top- and bottom-lines, but guidance that came in a little light for investors' tastes.

First-quarter EPS was 30 cents, besting views by 3 pennies. For its second quarter, Red Hat is modeling EPS of 28 cents to 29 cents and revs of $320 million to $322 million, a surprisingly tight range by all accounts. The Street is looking for EPS of 29 cents and revs of $330.8 million, which is 2.7 percent above Red Hat's upper-end estimate.

The stock is down 10.5 percent ahead of the bell Thursday, but Citi thinks investors should buy shares on any weakness.

Red Hat is scheduled for an Analyst Meeting on June 27th. Into that meeting, Citi thinks there will be plenty of data supporting the underlying drivers for Red Hat's story

Citi currently rates Red Hat at Buy, with a price target of $68. The firm boosted its price target on March 29th, following the company's fourth-quarter numbers.

For more ratings on Red Hat, click here.


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