Oracle (ORCL) Attractive as Defensive Play in Tough Macro World

December 19, 2012 10:04 AM EST
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Price: $40.10 +1.06%

Rating Summary:
    33 Buy, 19 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 19 | Down: 19 | New: 13
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Despite challenging macro, Oracle's recent Q2 earnings report proves it is a defensive large cap stock, in the view of analysts at Goldman Sachs. Oracle reported revenue and EPS that was ahead of consensus at $9.09 billion and $0.64 vs. $9.03 and $0.61.

"License performance was the highlight of the quarter," said analyst Heather Bellini. "After guiding to 5-15% reported license growth ORCL posted yoy growth of 17%, with currency an as expected 100 bp headwind."

On an organic basis, Bellini estimates 11 percent organic license growth.

As expected, hardware was a disappointment in large part because of its Sun legacy business continues to wind down faster than expected.

"While Oracle remains confident that the hardware segment will post yoy growth in its F4Q13 (ending May13), we conservatively model a decline of 1% yoy in F4Q13," said Bellini.

As the macro climate remains challenging, Goldman thinks Oracle will continue to remain an attractive defensive large cap stock.

Goldman Sachs reiterated a Buy rating on Oracle (NASDAQ: ORCL) and raised its price target to $37.00 (from $36.00).

For an analyst ratings summary and ratings history on Oracle click here. For more ratings news on Oracle click here.

Shares of Oracle closed at $32.88 yesterday.

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