Jefferies Cuts Price Target on Red Hat (RHT) to $76 Following 3Q Report
Jefferies maintained a Hold rating on Red Hat (NYSE: RHT), and cut the price target to $76.00 (from $79.00), following the company's 3Q earnings report. Total revenues of $615M and subscription of $543M missed consensus of $619M and $546M. EPS of $0.61 was in line after excluding a $0.03 discrete tax benefit.
Analyst John DiFucci commented, "Weak F3Q results were attributed to slipped US govt deals, lower upfront payments for large multiyear deals, and a more backend loaded period. The reasoning was somewhat difficult to follow and does little to explain the weak F4Q guidance, other than assuming another more backend loaded quarter than usual. New Sub ACV declined from a year ago, following several strong quarters. CFO Frank Caleroni is resigning, effective late Jan. to become CEO elsewhere."
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Shares of Red Hat closed at $79.79 yesterday.