Oracle Corporation (ORCL) Message Board

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Technology Stocks : Oracle Corporation (ORCL)

ORCL 228.89

+1.5%

10:53 AM EST

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To: JakeStraw who wrote (17582)	10/11/2002 12:21:50 PM
From: Night Writer	Read Replies (2) of 19079

Wells Fargo Securities Re-Initiating Coverage On Oracle Corporation with Hold Rating SAN FRANCISCO, Oct. 11 /PRNewswire-FirstCall/ -- Eric Upin, enterprise software analyst at Wells Fargo Securities, has re-initiated coverage on the shares of Oracle Corporation (Nasdaq: ORCL) ($8.51) with a Hold rating. Below are direct quotations from Mr. Upin's research report: * We are initiating coverage on Oracle Corporation with a Hold rating. Our rating is based on: 1) continued concerns surrounding the current IT spending environment; 2) longer-term growth rates of Oracle's core businesses (when growth resumes); 3) the competitive landscape (and resulting pricing pressure); 4) relatively generous valuation of 23x CY03 EPS estimates; and 5) the risks and implications to the company's future business model if present trends continue or only slightly improve. * We continue to believe that there is the material risk of additional downward revisions to C4Q02 and CY03 projections. As a result, we believe that it remains too early to be a buyer of the stock and boldly build an Oracle position at these levels. In general, software stocks rarely perform well during periods of downward estimate revisions-unless there is the firm conviction that the current downward revision cycle is in the final stages. * We believe that these additional downward revisions are likely to continue through at least early next year. Moreover, we cannot make a strong valuation argument for additional upside on either an earnings multiple or discounted cash flow (DCF) basis. In fact, the stock is rather generously valued for a company that delivered four consecutive quarters of 20%+ year-over-year software license revenue declines-where we are modeling continued year-over-year declines in the range of 20-25% in software license revenues throughout FY03 (ending May) and rather limited growth projections of 10% in FY04. * As a result, we like the stock in $5 to $6 range and believe that the stock is over-priced in the $10 to $12 range. Price is as of the market close on October 10, 2002. Wells Fargo Securities is a market maker in the securities of the subject company. WELLS FARGO SECURITIES RATING SYSTEM BUY -- Immediate purchase is recommended; the stock is expected to outperform the general market over the next 12-18 months. HOLD -- Holding the stock is recommended. The stock has moved out of our preferred buying range, but there is further upside to the share price; or stated objectives at the time of purchase have changed and share appreciation may take another 6-12 months. SELL -- The stock has reached the stated price objective and appreciation has been achieved; or certain company fundamentals have changed which warrant investors selling the stock to avoid price decline.

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