Goldman Cuts Rating on Oracle

Analyst Rick Sherlund says the downgrade reflects reduced near term visibility

Goldman Sachs downgraded its investment rating on Oracle (ORCL ). The firm removed Oracle from its recommended list and now rates the shares market outperform.

Analyst Rick Sherlund says he expected slower database growth, but this is worse than he thought. He believes this will be a negative catalyst for the broader software sector, and he cut ratings on a number of stocks.

Sherlund cut his $0.51 fiscal 2001 (May) EPS estimate to $0.47 and cut his $0.64 fiscal 2002 estimate to $0.57. He notes Oracle shares have already been impacted by Q3 apprehensions, and says the stock could trade down to the mid- to high teens. He views shares as attractive at these reduced levels. The downgrade reflects reduced near term visibility.

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