4 big analyst cuts: Oracle slashed at JPMorgan on flimsy guidance

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4 big analyst cuts: Oracle slashed at JPMorgan on flimsy guidance
Credit: © Reuters.

By Davit Kirakosyan

Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Oracle, Acelyrin, Ecopetrol, and Ultrapar.

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Oracle downgraded again

Oracle (NYSE: ORCL ) was cut to Neutral from Overweight at JPMorgan on Wednesday after the company issued soft Q2 guidance that saw shares drop more than 13% in Tuesday's session.

The company said intense competition within the cloud-computing sector and a reduction in digital spending were weighing on its top-line growth.

JPMorgan also trimmed the software giant's price target to $100 from $112. The analysts said that, while Oracle still has strengths such as strong growth in its cloud segment, AI-related business wins, margin expansion, and healthy recurring revenue growth, its valuation has reached over 25x EV/uFCF, making it difficult to justify a higher price target.

The analysts also cited a recent Generative AI CIO Survey in June that raised questions about Oracle's positioning.

The downgrade follows Tuesday's cut at Monness, Crespi, Hardt, which also downgraded Oracle to Neutral.

Acelyrin slashed at Morgan Stanley following disappointing Izokibep trial results

Morgan Stanley downgraded Acelyrin (NASDAQ: SLRN ) to Equalweight from Overweight and cut its price target to $19.00 from $39.00, as reported in real time on InvestingPro.

Shares plunged more than 54% Tuesday after the company’s Phase 2b/3 trial evaluating izokibep for the treatment of moderate-to-severe Hidradenitis Suppurativa (HS) didn’t hit the primary endpoint.

The analysts say the downgrade comes on increased uncertainty regarding HS and the challenging short-term prospects for the company. However, Morgan Stanley plans to re-evaluate its views later this year, when they say the setup for the company may be significantly improved.

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Two more downgrades

Citi downgraded Ecopetrol (NYSE: EC )to Neutral from Buy with a price target of $12.50.

Goldman Sachs downgraded Ultrapar (NYSE: UGP ) to Neutral from Buy with a price target of $4.00.

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