Oracle Corporation (NASDAQ: ORCL) is set to report earnings after the close of trading on Tuesday. The enterprise software leader is expected to report earnings of $0.61 EPS and $9.03 billion in revenue. For the existing quarter, analysts expect earnings of $0.66 EPS and $9.46 billion in revenue.

Despite the fairly recent woes of the past in earnings, Oracle is now back up close to within about 2% of its 52-week high of $33.29. The consensus analyst price target is also above $35.80 for this stock, which we would note represents an all-time high.

If Oracle only meets its earnings estimates for its fiscal year of May 2013, this stock is not expensive at barely about 12-times earnings. Options traders appear to be braced for a move up to almost 3% in either direction. If there is a disappointment, the longer-term moving averages are too far under the current price to offer much objectivity as the 50-day moving average is at $31.01 and the 200-day moving average is all the way down at $29.77.

One research note stood out recently. Oracle was only reiterated with an Outperform rating by Credit Suisse, but this came along with a $40 price target. The firm even summarized its call as follows by saying “Headwinds Fading… So, Jump on Board!”

We were a bit disappointed with Oracle over its dividend policy. Rather than deliver a large one-time dividend to return capital to holders ahead of a tax hike, Oracle slid forward the 2013 payouts for January, April and July into December. While this was somewhat aggressive, it really did not get Oracle on a real competitive landscape as far as a permanent dividend policy when Larry Ellison has already said he will not be pursuing any large acquisitions in the near future.

Oracle’s market capitalization rate is $157 billion and Thomson Reuters has a consensus estimate for its fiscal year in May 2013 of almost $38.3 billion.

JON C. OGG

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