We're not talking about Oracle (ORCL) here, only the impact of a research report from RBC that was too cute by half, and it's effect on Oracle's stock price.
Right now, Oracle is flying, up nearly 2 percent in pre-market trading, more than both IBM (IBM) and Microsoft (MSFT), which are also up decidedly.
But back to that report. RBC upgraded Oracle, if you can call it an upgrade, from a sector perform to an outperform. Got that? You kind of have to squint to see the distinction, but RBC used to think Oracle would do as well as its sector. Now they think it will outperform its sector. How convinced are they?
Well, Oracle is bearing down on $30. RBC's old price target-back when Oracle was going to trade in sync with the likes of SAP (SAP), which is up twice as much as Oracle today, was $33. Now that it's going to trade better than its sector? They brought the price target all the way up to, uh,…$36.
Look, what you are seeing here is not research or conviction. It's the age-old act of a Wall Street analyst covering their tush, saying something, yet saying nothing, at the same time.
Today, Oracle might be aided by another fleeting boost: an agreement to save European banks, which has stocks like Citigroup (C), Bank of America (BAC) and JP Morgan (JPM) once again assuming the best for Europe, despite the fact that this is another agreement with the staying power of a blink.
Moreover, tush-covering reports attract a bit of fast money, but then guess what? Reason takes hold. If you like Oracle, buy the stock long-term. But don't get into it on the strength of a weak-willed research report.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
