UPDATE: Bank of America Downgrades Red Hat to Neutral

Bank of America has published a research report on Red Hat

and has downgraded the company from Buy to Neutral. In the report, Bank of America writes, "RHT printed solid revs +23% y/y (inline) and cash flow of $97mn vs. our $86mn. Billings growth of +25% (ex-currency) was respectable but below the high- 20s expectations. Volume of +$5 mn and +$1 mn deals was record high, which drove solid off-balance sheet bookings, which RHT will likely quantify in Q4. However, +25% is a deceleration from +30% growth in Q2. Moreover, seeing CRM's billings deceleration and negative investor reaction despite strong off-balance sheet backlog, we fear RHT may not get the credit it deserves." Bank of America has also lowered the price objective from $52 to $44 on Red Hat, which is currently trading down $3.02 from yesterday's $46.05 closing price.