UPDATE: Red Hat Upgraded To Buy At BlueMatrix On Stabilization

Red Hat Inc

saw its shares upgraded by BlueMatrix to the equivalent of Buy on a stabilizing growth rate of its core product and increasing contributions from new offerings. Red Hat, which provides open-source business software, is up 4 percent in the year to date, slightly under performing the S&P 500. J. Derrick Wood of BlueMatrix said the shares "have really been stuck in a narrow range for two years" as revenue growth in its core enterprise Linux distribution system slowed. Wood, in a note Friday, said the category is now stabilized at a 12 percent growth rate while beginning last quarter, revenue from new products related to middleware and storage have become significant. Wood set a $71 target on the shares. "Upside momentum is starting to re-emerge," Wood said. He expects new products will grow annually by 34 percent while the core Linus product stabilizes at 12 percent growth. Red Hat traded recently at $58.26, up 0.24 percent.