Stifel Believes FX And Tough Comps Limit Upside For Red Hat

In a report published Friday, Stifel analyst Brad Reback reiterated a Buy rating and $64.00 price target on

. In the report, Stifel noted, “Broadly speaking, we believe healthy and long-term growth opportunities remain for RHEL as companies modernize datacenters around Linux and build-out private/hybrid clouds. Although RHT's newer initiatives will likely not drive significant revenue/billings growth until at-least CY16 (markets remain immature, ratable nature of RHT's subscription revenue, etc.), we think these efforts are the right strategy. While newer initiatives will weigh on margin expansion, we like RHT's large installed base, high degree of recurring revenue, strategic position within the data-center and given an attractive valuation, remain long-term buyers.” Red Hat closed on Thursday at $58.42.