) to buy from strong buy.
Analyst Neil Herman says he is worried that the fourth quarter, typically a seasonally strong period for the company, could prove to be unusually weak given the tough U.S. macroeconomic environment and potentially weakening conditions in international markets. Herman says that apparently more Sun Microsystems servers are sold running Oracle software than anything else; therefore, weak results and guidance from Sun compound his worries. He believes IBM, with its DB2 product, is exerting some price pressure on Oracle.
The analyst says that with its recent rise, Oracle stock is at a significant premium to historic range both on price-to-earnings (p-e) and revenue multiple bases despite near-term uncertainty. He cut his $0.55 EPS estimate for fiscal 2002 (May) to $0.49.