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UPDATE: Societe Generale Lowers PT on Oracle Corporation on Multiple Challenges Ahead

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In a report published Thursday, Societe Generale analyst Richard Nguyen reiterated a Hold rating on Oracle Corporation (NYSE: ORCL), but lowered the price target from $36.50 to $35.00.

In the report, Societe Generale noted, “We think Oracle may continue to struggle in H2 13 due to company-specific issues: 1) execution issues that have been already flagged repeatedly over the last three quarters; this impacts negatively its deal close rate despite a healthy pipeline; 2) product momentum: a) the revenue ramp-up of the new 12c database should be relatively gradual (SGe database >50% group revenue) despite recently announced partnerships (Microsoft,,) and added in-memory option; b) the recent partnerships with SaaS vendors (NetSuite, may further curb the pace of customer adoption of Fusion Apps (FA) as they need to know how these alliances might impact FA; c) hardware products (8% group revenue) are still struggling to return to growth. Impact on SGe estimates: for FY14e, we nudge down our revenue forecasts by 1% to $38.2bn, with a 3% reduction in new licenses/cloud sales to $10.6bn and 5% in hardware product revenue to $2.7bn. As a result, we trim our non-GAAP EPS by 3% to $2.83. For FY15e, we lower our revenue and non-GAAP EPS estimates respectively by 2% and 4%.”

Oracle Corporation closed on Wednesday at $33.90.

Latest Ratings for ORCL

Nov 2015Goldman SachsUpgradesBuyConviction Buy
Nov 2015Morgan StanleyDowngradesOverweightEqual-weight
Nov 2015FBR CapitalDowngradesOutperformMarket Perform

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