Enterprise software giant Oracle Corporation ( ORCL ) on Thursday saw its price target lowered by analysts at Macquarie Group.
The firm reiterated its "Outperform" rating on ORCL but cut its price target from $38 to $36. That new target suggests a still-massive 35% upside to the stock's Wednesday closing price of $26.68.
A Macquarie analyst commented, "Our analysis of Oracle's hardware business hinges on management's stated goal of selling 2,000 Exadata units in FY2012. Assuming this goal is achieved (and we recognize the limits of our assumption), we estimate that current Street models imply the remaining hardware business will be down 15% y/y, which we view as appropriately conservative, and partially offsets broader IT spending risks. Further, we see upside to Street hardware gross margins on the improved mix which could result in an incremental $0.02 to EPS."
Oracle shares, which have fallen nearly 15% year-to-date, posted modest gains in premarket trading Thursday.
The Bottom Line
Shares of Oracle Corp ( ORCL ) have a .90% dividend yield, based on last night's closing stock price of $26.68. The stock has technical support in the $22-$24 price area. If the shares can firm up, we see overhead resistance around the $28-$30 price levels.
Oracle Corporation ( ORCL ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.
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