Red Had (NYSE:RHT): Jeffco upgrade to Buy; Cisco relationship on tap?
- Microsoft (MSFT) Near Deal to Acquire Nuance (NUAN) - Report
- S&P 500, Dow climb for third day and close at records
- Tesla (TSLA) China Numbers 'Robust' - Wedbush
- Apple (AAPL) Shares Seen as 'Attractive' as Recent Checks Show Continuously Strong Demand - Citi
- Investors Poured More Money Into Stocks in Past 5 Months Than Last 12 Years, Says BofA, Analysts Worried About Stretched Valuations
From Notable Calls
Jefferies is out with an interesting upgrade on Red Had (NYSE: RHT) taking their rating to Buy from Hold with a $16 tgt.
OK November. Checks indicate steady demand for the core RHEL products (AP, RHN, etc.), while Jboss sales continue to outperform. It seems like Red Hat is picking up some share in middleware dueto BEA/Oracle (Nasdaq: ORCL) dislocation and because open source solutions become relatively more attractive as budgets tighten.
Cisco relationship on tap. Industry sources indicate that Cisco's (Nasdaq: CSCO) upcoming line of blade servers is likely to offer RHEL as an option, perhaps even as the default OS. The KVM (non-bare metal) virtualization features in RHEL would allow any type of virtualized container to run on the Cisco blades.
Upgrade to Buy. With 100% recurring revenue including 80% off the balance sheet in any given quarter, increasing Jboss sales, and low-cost leadership, Red Hat is well-positioned to buffer the '09 spending storm. Additional revenue from a deal with Cisco would provide upside to our current estimates. The company has $3.90 in net cash per share, and on a cash flow basis, the shares are yielding about 16%.
Notablecalls: 1) Beaten down stock 2) Very low valuation (16% FCF yield is low), 1/3 of mkt cap in cash 3) A catalyst in the horizon in form of Cisco news.
RHT should see some nice buying interest following this call.
For more calls go to http://notablecalls.blogspot.com/
You May Also Be Interested In
- UPDATE: Goldman Sachs Upgrades Copa Holdings (CPA) to Buy
- Alibaba (BABA) PT Raised to $336 at Jefferies on Growing Businesses Turning to Profitability
- Macquarie Upgrades Nanya Technology Corp (2408:TT) to Outperform
Create E-mail Alert Related CategoriesContributors, Upgrades
Related EntitiesJefferies & Co, Notable Calls
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!