BMO Capital analyst Keith Bachman downgraded Oracle (ORCL) to Market Perform from Outperform with an unchanged price target of $53 following last night's fiscal Q3 results. The stock in premarket trading is down 3%, or $1.65, to $51.40.
The analyst believes Oracle can sustain ~2% constant currency revenue growth but is "dubious" the company can improve its revenue growth rates. He does not think an autonomous database or gradual unfolding of the cloud enterprise resource planning market will help Oracle's growth in fiscal 2020.
As demonstrated by IBM (IBM) over the years, an aggressive buyback will not be enough to push the shares meaningfully higher without improved top-line results, Bachman tells investors in a post-earnings research note. As such, he sees a balanced risk/reward profile at current share levels.
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