Canaccord Genuity may have raised its target from $48 to $30 on Oracle Corporation (NASDAQ: ORCL) this morning, but the overall tone is one of caution on valuation.
The report noted, “Guidance is slightly lower than the mid–point. We’ve rolled through the lower tax rate, which boosts reported EPS although revenue growth (constant currency or adjusted) is a shade lower than our previous forecast at 2% for May and 8% for F2013.”
It also noted, “The fact is that Oracle is not growing particularly rapidly, and despite an extended discussion to the contrary the firm is facing a tougher group of competitors. We suspect that this realization probably accounts for the stock’s underperformance versus the market on 12- and six- month periods and a market performer post the December 20 earnings miss.” The other caution now is that Oracle is currently not ahead of its competitors in software architecture or business momentum and is playing catch-up.
Canaccord Genuity is just maintaining a HOLD rating today.
JON C. OGG