Oracle initiated with a Sell at Rothschild & Co Redburn

Rothschild & Co Redburn analyst Alex Haissl initiated coverage of Oracle (ORCL) with a Sell rating and $175 price target The firm believes the market “materially overestimates” the value of Oracle’s contracted cloud revenues. The company’s role in single-tenant, large-scale deployments is closer to that of a financier than a cloud provider, “with economics far removed from the model investors prize,” the analyst tells investors in a research note. Rothschild’s analysis suggests Oracle’s five-year cloud revenue guidance equates to $60B in value, indicating the market is already pricing in a “risky blue-sky scenario that is unlikely to materialize.”