Prudential Cuts Red Hat to Neutral
Red Hat (RHAT ) announced that its chief financial officer, Kevin Thompson, resigned. Prudential downgraded the stock to neutral from overweight.
Analyst Brent Thill says the resignation raises a yellow flag. He notes after speaking with the company last night, he has no reason at this point to think the resignation is due to any underlying accounting or internal issues that will surface. But he notes that the timing and abruptness of the resignation makes little sense to him, leaving him to think there may be hidden issues not yet uncovered.
Thill believes the transition was poorly handled; the hinks a potential resignation began to leak out, forcing Red Hat to put out a public statement well ahead of when they actually wanted. He cuts his $28 price target on the stock to $24.