UPDATE: Stifel Reiterates Buy Rating, Raises PT on Red Hat Following Strong 3Q14 Results

In a report published Friday, Stifel analyst Brad Reback reiterated a Buy rating on

, and raised the price target from $60.00 to $63.00. In the report, Stifel noted, “Following lackluster billings growth 2 of the last 3 quarters, RHT appears to be back on track. The company posted strong 3Q14 results across most key metrics, but we were most pleased to see billings growth re-accelerate, increasing 19.5% (17.5% when backing out benefit from 2Q deal), topping our estimates of 11.6%. The impressive billings growth (strongest in 6 quarters) was driven by a snap back in demand in Europe, strong performances in the Americas (especially in the US Federal vertical), healthy renewal activity and solid cross/up-sell activity. Looking ahead, we believe RHT's pipelines remain robust across its broad product portfolio and believe the RHEL business still has healthy growth in front of it (expect RHEL 7 to go GA in FY15). Additionally, we believe its newer products are gaining traction and think RHT is uniquely positioned to benefit from customers shifting architectures towards open, hybrid clouds. Given these dynamics, we continue to believe RHT can sustain billings growth in the teens over the next several years and are raising our TP to $63 from $60.” Red Hat closed on Thursday at $49.00.