We cut our target by $14 to $67, the product of our EPS forecast for '24 of $5.10, now $0.56 lower, and a 13.1x P/E (3-year mean, -13% due to $55B in net debt, 28% of market cap, likely growing to $84b, 43% of present market cap, when/if the CERN acquisition is finalized, partially offset by 1.7% dividend yield). We see maintenance on legacy client-server apps - 46% of FY 3Q22 (Feb-Q) revenue - likely falling faster now due to greater financial pressure and macro uncertainty that motivates cloud migration as it did in 2020. We see ORCL maintenance revenue, which fell 3% Y/Y in 3Q22, declining 6% to 9% Y/Y over the next year and continuing to contract from there. Our EPS forecast for '22 remains $4.75, but we cut '23 by $0.27 to $4.88. We see only moderate sales and operational synergies with CERN given the large maintenance and professional services components of revenue, with the potential for faster customer attrition as healthcare service organizations look to boost operational agility via cloud migration.
|-- Earnings Flash (AQS) AEQUUS PHARMACEUTICALS Repor...|
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