Shares of Oracle (ORCL) are up 68 cents, or 2.5%, at $27.59 after ThinkEquity‘s Yun Kim this morning upgraded the shares to Buy from Hold, with a $33 price target, writing that risk/reward is favorable for the shares with prevailing negative sentiment but a fairly “steady” state of the business, based on Yun’s “checks.”
In particular, the current fiscal Q4 that ended last probably met the consensus estimate for $10.89 billion in revenue and 78 cents EPS, Yun thinks. Yun’s own estimate is for $10.85 billion and 77 cents:
Our checks with large system integrators and resellers lead us to believe that the company should be able to at least meet our and current consensus F4Q estimates, which we believe could serve as a positive potential catalyst given what we view as the current negative investor sentiment regarding ORCL’s business. We believe its business applications segment performed well in the quarter, driven by its CRM offerings. We also believe that its hardware (specifically Exadata) business came in solid, although we continue to remain wary of the lack of margin leverage in that business in the near-term. Our checks on its database business were somewhat mixed, but we believe it should be in-line with our y/y license revenue growth estimate of 3% (even after adjusting for currency headwind).
Kim is modeling $40.07 billion in revenue and $2.70 per share in profit in the current fiscal year, versus the consensus $39.49 billion and $2.63 per share.
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