Lehman Cuts Oracle Estimates

Analyst Neil Herman thinks the business software company will likely miss its targets, given pricing pressure and the tough environment

Lehman Brothers cut estimates on Oracle (ORCL ).

Analyst Neil Herman says given the tough microenvironment, price pressure inflicted by purchasing managers, the challenges of Oracle 11i, and continued employee departures, he believes the chances of the company hitting fourth quarter estimates are low; he cut his $0.13 fourth quarter earnings per share estimate to $0.11, and trimmed the 23% total revenue growth to 15%.

Herman believes the overwhelming bulk of the bad news is reflected in the stock price, which limits the downside. However, although he doesn't know when it will occur, eventually, there will be some good news, or at least some good news about an environment, which will translate in multiple expansion.

He recommends Oracle for long term oriented investors.

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