Standard & Poor's Reiterates Positive Outlook for Oracle Corp

Strategic Insights -

Standard & Poor's has maintained its four-star recommendation on Oracle Corp's shares, citing the company's significant earnings per share (EPS) upside potential. Despite a high price-to-earnings (P/E) ratio, analyst Brian Goodstadt believes Oracle's continued margin improvement and integrated suite strategy will drive the stock forward. Meanwhile, S&P analyst Mark Basham has expressed caution on the upcoming Handspring Inc. initial public offering (IPO), citing a number of factors that make it a less attractive investment opportunity. ON Semiconductor, a spin-off from Motorola's semiconductor business, is also gaining attention for its revenue growth and margin improvements.

Key Takeaways:

  • Standard & Poor's reiterated its four-star recommendation on Oracle Corp, citing EPS upside potential and continued margin improvement.
  • Analyst Brian Goodstadt attributed the positive outlook to Oracle's integrated suite strategy, which has led to a 61% surge in applications sales.
  • Despite a high P/E ratio, Goodstadt sees significant growth potential for Oracle.
  • S&P analyst Mark Basham has expressed caution on the Handspring Inc. IPO, citing factors that make it a less attractive investment opportunity.
  • Basham recommends investors deploy new-issue funds elsewhere.
  • ON Semiconductor, a spin-off from Motorola's semiconductor business, is gaining attention for its revenue growth and margin improvements.
  • The company's leveraged buyout from Motorola last August has provided ON with increased revenue and operating margins.

Statistics:

  • Oracle Corp's EPS (excluding gains) for fiscal 2000 fourth quarter was $0.31, 4 cents above S&P's estimate.
  • The company's integrated suite strategy has led to a 61% surge in applications sales.
  • ON Semiconductor's revenue growth and margin improvements are expected to drive the stock forward.
  • The company's P/E ratio is high, but analysts believe it has significant growth potential.

Sources:

  • "S&P Reiterates Accumulate on Oracle Shares" (S&P Personal Wealth, no date)
  • "Don't Fall for Handspring IPO" (S&P Personal Wealth, no date)
  • "ON Semi: This Motorola Spin-Off Is on a Roll" (S&P Personal Wealth, no date)
  • "S&P Personal Wealth" (Standard & Poor's, no date)