Morgan Stanley Sees Mixed Factors for Red Hat

In a report published Friday, Morgan Stanley analyst Keith Weiss reiterated an Overweight rating and $69.00 price target on

. In the report, Morgan Stanley noted, “Difficult YoY comps, FX headwinds and billings impacts from a ramping cloud business create challenging optics in Q3. However, strong renewal base growth, stable RHEL performance and growing Open Source momentum should sustain mid-teens growth into FY16 vs. a reasonable 14X EV/CY16 FCF multiple.” Red Hat closed on Thursday at $58.42.