Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (17582)	10/11/2002 12:21:50 PM
From: Night Writer	Read Replies (2) \| Respond to 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.