BMO nalyst cuts rating on Red Hat shares

BMO analyst lowers Red Hat rating after rally, cites concerns about growth of Linux OS market

Associated Press

NEW YORK (AP) -- A BMO analyst downgraded Red Hat Inc. shares Monday after their rally this month, and the software company's shares dropped.

Red Hat is the company behind the Linux open-source operating system. BMO Capital Market's Keirstead noted some industry concerns that growth expectations maybe be too high for companies adopting Linux. Moreover, he remains concerned about a weak computer server market as companies watch their technology spending.

A representative for Red Hat did not immediately respond to an email seeking comment.

Keirstead cut Red Hat to "Market Perform" from "Outperform" in a Monday research note, keeping a $54 price target on the stock. Shares had risen 15 percent in May through Friday's close, but fell $2.26, or 4.1 percent, to $52.74 Monday.

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