UPDATE: BMO Capital Markets Initiates Coverage on Red Hat with Outperform Rating, $55 PT on Market Leader Position

In a report published Thursday, BMO Capital Markets analyst Joel P. Fishbein Jr. initiated coverage on

with an Outperform rating and $55.00 price target. In the report, BMO Capital Markets noted, “We believe Red Hat, as the leader in providing open-source software solutions to the enterprise, is one of the best-positioned companies in mid-cap software. Red Hat takes advantage of several secular trends, including the unabated shift from UNIX to Linux, open-source virtualization and middleware, software-based storage, and Big Data. Red Hat also benefits from several key near- and long-term tailwinds, including migration to higher-priced Red Hat solutions, up-sell (virtualization, middleware/PaaS, Storage, OpenStack), and the opportunity to convert free Linux offerings to paid. In our view, Red Hat's recurring revenue model, high revenue visibility, and sticky customer base are under-appreciated.” Red Hat closed on Wednesday at $46.66.