A pair of analysts are coming to the defense of Oracle (ORCL) shares, asserting that the stock’s slide on worries about the weak Euro have been overdone – and that Oracle shares could be a good place to hide out in a tumultuous environment.
- Citigroup analyst Walter Pritchard writes that the impact of “southern European turmoil” is not likely to spoil the company’s “typically strong fiscal fourth quarter,” which ends in May. “Inputs from enterprise IT peers such as HP, Dell and Cisco” suggest “strong solid fundamentals in Europe overall.” But he adds that no one is likely to be able to prove that until after Memorial Day. Also, note that he trimmed his price target on the shares to $28, from $32. He also snipped his FY 2010 estimate to $1.65, from $1.66, and for FY 2011 goes to $1.95, from $1.99. Pritchard maintains a Buy rating on the shares,
- UBS this morning advised investors to take a more defensive stance on technology shares. “Given its growing percentage of the world economy, tech has not been immune from increased macroeconomic fears and investor de-risking,” analyst Nikos Theodospoulos writes in a research note. “Although tech earnings remain strong with reasonable valuation levels, we see less potential upside to second half 2010 fundamentals given tougher comps and growing demand uncertainty in Europe and China. As a result, we continue to recommend increasing exposure to more defensive sub-sectors, namely software and to a lesser degree services, while reducing exposure to cyclical areas of tech such as semiconductors and solar.” In connection with that call, UBS is adding Oracle to its “Tech 10″ list, replacing chip maker Semco.
ORCL is down 49 cents, or 2.2%, to $21.79.
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