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Cowen analyst, Derrick Wood, reiterated his Outperform rating on shares of Oracle (NYSE: ORCL) but recognized that there are several new factors pressuring EPS. Software growth was solid and came in at the high-end of guidance & GM expansion elements are well intact; but the combination of weakening hardware and transitory factors below the operating line (higher tax rates, new debt burden w/o N closure) are spoiling the EPS growth recovery.
Confidence in cloud traction remains high & EPS growth is expected to continue in FY17, but an inflection is not likely to happen till FY18. No change to the price target of $46 which represents a ~16x P/E multiple.
Shares of Oracle closed at $40.86 yesterday.
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