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

To: Matt Brown who wrote (8987)	12/9/1998 7:56:00 PM
From: Linda Pearson	Read Replies (1) \| Respond to of 19080

Top Stories: The Oracle Oracle Strikes Again By Medora Lee Staff Reporter 12/9/98 6:59 PM ET SAN FRANCISCO -- A day before database-software leader Oracle (ORCL:Nasdaq) is slated to deliver its earnings for the second quarter ended Nov. 30, Prudential Securities analyst Doug Crook turned up the pressure on the stock, downgrading it to accumulate from strong buy. Crook, whose firm has not underwritten for Oracle, said the recent rally in Oracle shares has gotten ahead of fundamentals. The Redwood City, Calif., company beat analysts' expectations last quarter by 4 cents a share with help from a stronger-than-expected 25% jump in database revenue. That, coupled with the drop over the past year in Oracle's share price, prompted Crook in September to upgrade the stock to strong buy from accumulate. Shares have nearly doubled since then and are lingering near 52-week highs on renewed optimism over the database-product market and Oracle's insistence to Wall Street that its weak applications business is finally picking up. The rally in stock price put Crook's September call right on the money, but now he thinks it's time to step back. In the report, Crook said he still believes Oracle is back on track and will likely report a strong second quarter with a profit of 24 cents a share, in line with First Call's consensus estimate. But, he added, Oracle's stock "is already largely discounting the turnaround. At 36, it is valued at 28 times our calendar year 1999 earnings estimate of $1.29. ... We believe this represents a premium valuation, especially for a turnaround story." Oracle shares this afternoon showed little reaction to Crook's downgrade, rising 3.5% to 36 5/8. But Crook, a former engineer at IBM (IBM:NYSE), has made a couple of good calls on Oracle recently. Not only did he catch Oracle's recent move up, but Crook switched his buy rating to accumulate in August when Prudential added a level to its rating system. That move came just before Oracle's stock hit a low of 18 3/16 in early September, which was its lowest level since January. Crook wasn't available to discuss his report.