J.P. Morgan Discusses Analyst Day From Red Hat (RHT)

J.P. Morgan Chase & Co. has an Underweight rating and a $32 price target on shares of Red Hat RHT following the company's analyst day. In a note to investors, J.P. Morgan writes, "CFO Charlie Peters gave a brief financial overview at the analyst day and focused his message on three main points: Consistent Top-Line Growth, Increased Investments versus Leverage, and Cash Flow Dynamics. We continue to believe that RHT will never get any leverage in the most important expense line in the software model – Sales & Marketing – unless it foregoes subscription renewals, causing a decline in billings." J.P. Morgan goes on to say, "The company highlighted its product breadth with presentations from each business unit. The focus surrounded the opportunities within Cloud, including new product releases and updates to current products. Presentations were made from Jim Totton, Vice President and General Manager Platform Business Unit., Craig Muzilla, Vice President and General Manager Middleware and Scott Crenshaw, Vice President and General Manager Cloud." Shares of RHT gained 19 cents on Friday to close at $45.79, a gain of 0.4%.