UPDATE: Wedbush Initiated Oracle at Neutral on Tough Revenue Expectations
Wedbush initiated coverage on Oracle (NASDAQ: ORCL) with a Neutral rating and a $36 price target.
Wedbush noted, "We believe Oracle is a large, liquid, and relatively defensive software investment due to its heavy mix of maintenance revenue, broad product portfolio, and diverse customer base. … Relative to consensus, we expect ORCL to be somewhat challenged on revenues, but to meet or beat on EPS going forward. By our calculation, consensus estimates imply about 100 bps of operating margin expansion in FY14, on revenue growth of 7%. This level of revenue growth seems ambitious given ORCL's maturity, but we think ORCL should beat consensus margin forecasts based on good cost control and operating leverage."
Oracle closed at $32.03 on Thursday.
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