JPMorgan believes that Oracle could still face more pain, despite Tuesday’s decline. Analyst Mark Murphy reduced his price target from $100 to $12 and downgraded cloud stock to neutral. His new price target represents an 8.8% drop from the close on Tuesday. Oracle reported mixed results Monday for its fiscal first-quarter. The company missed consensus expectations from analysts polled LSEG (formerly Refinitiv) for revenue, but beat earnings per share. The stock dropped 13.5% in Tuesday’s worst session since 2002. Murphy wrote in a Tuesday note to clients that Oracle’s achievements are still legitimate, and that investors will continue to be interested in this story. We also feel that some counterbalancing dynamics may need some time to be absorbed and factored into the system. Murphy believes Oracle’s cloud business is peaking just as new obstacles are arising from Cerner’s acquisition and the buildout of its data center. He said that the move was a counter-intuitive upgrade after the stock’s bottomed out in the mid-40 range. The stock would not trade below 10 times earnings long, he added. Murphy says it is hard to justify valuations above 25 times enterprise value divided by unlevered free cash flows. It’s hard to imagine the stock trading above $112, despite the fact that Wall Street peers have pushed the stock briefly over this level. He said that the solid growth of Oracle’s cloud business is another reason for the company to be proud. This, along with the wins it has made in the artificial-intelligence space and the margin expansion during the Cerner transition, are also reasons. Investors should also be happy about what he calls healthy recurring revenue increases, and not be too harsh on the declines of some businesses because they are not core business. He said that there are still many reasons to pause for investors. Cerner has been experiencing a slower compound annual growth rate than anticipated for several quarters. Murphy said that there are “more questions than solutions” because the company is creating headwinds in revenue growth. Oracle has also raised concerns over its ability to implement a data centre buildout, which could hinder cloud growth. He said that it’s a difficult time compared to previous years when it comes to revenue left over from contracts. He noted that while there are many reasons to be excited by AI, the survey of CIOs revealed “room for improvements.” He said there are also financial concerns. He said that some have overlooked the $27 net debt per share. He also said that a decrease in capital expenditures should be watched. Michael Bloom, a CNBC reporter, contributed to this article.