| Tech Stock News and Analysis |
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| Wednesday, September 27, 2006 |
Red Hat Inc., which provides software, was downgraded by two brokerages on Wednesday after the company lowered its second-quarter earnings forecast and full-year cash flow on higher costs related to the JBoss merger.
In a research note, Jefferies & Co. lowered its rating to "hold" from "buy" and cut its price target on the stock to $24 from $34.
Separately, Prudential Equity Group lowered its rating on the company to "neutral weight" from "overweight" and cut the price target to $25 from $35.
Both brokerages said the company faces higher costs to integrate software maker JBoss, which Red Hat purchased in June.
Prudential said it is concerned that ongoing execution issues could cause Red Hat to miss outlook.
Shares of the company closed at $26.32 Tuesday on the Nasdaq. |
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