UPDATE: Bank of America Reiterates Buy Rating, Raises PT on Red Hat as 2H Rebound Thesis is Playing Out

In a report published Friday, Bank of America analyst Kash Rangan reiterated a Buy rating on

, and raised the price target from $61.00 to $63.00. In the report, Bank of America noted, “The stock is up 10% in the after-market following a significant billings beat and improved execution. Our thesis of a 2H rebound has played out, with billings up 21% y/y in CC vs expectations of 10%. The company has the history of repeatedly coming back following mixed results, demonstrating the ability to deliver consistently in the face of pessimism. The 3Q beat was helped by q/q recovery of US Federal and OEMs. Positives in the quarter include strong Europe and US Federal performance, improved sales execution and cross-sell following investments in middleware solutions architects entering the year, strong large deals renewals at 120% with particular strength in government and financials, several initial OpenStack six figure deals, and the beta launch of RHEL 7. Asia grew modestly and cash flow was down 5% on a back-ended quarter, resulting in increase in AR.” Red Hat closed on Thursday at $49.00.