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Red Hat's Fiscal Q1 Outperformance Boosts Shares, Approved By Analysts

John Seward

Red Hat's (NYSE: RHT) fiscal first-quarter outperformance moved the shares 3.7 percent higher Thursday while engendering broad approval from analysts.

During the quarter Red Hat "fired on all cylinders" Raymond James' Michael Turits said in a note maintaining an Outperform rating and target of $63.

Turits noted the company signed large deals early in the period and growth accelerated in its public cloud segment. "We're positive on Red Hat's opportunities" concerning growth in Linux and Open Stack products as well as storage related to recent acquisitions."

Oppenheimer's Brian Schwartz maintained an Outperform and $74 target, saying Red Hat's core business will grow "in the double digits for years to come." That leaves emerging aspects of the business "as free upside."

The growing adoption of Open Stack and the cloud computing trend leaves Red Hat strongly positioned, Sitikantha Panigrahi of Credit Suisse said.

Panigrahi maintained a Buy rating and $71 target.

Barclays' Raimo Lenschaw maintained an Overweight rating and a price target of $71 a share, saying Red Hat's core products continue to perform well. But "momentum is clearly picking up with newer products" including its RHEL 7 and Openstack, Lenschaw said in a research note.

Deutsche Bank weighed in by calling Red Hat's first quarter "a clean beat," but maintained a Hold on the stock and a target of $60.

Red Hat closed Thursday at $55.11 up 3.79 percent.

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