Oracle Corporation (ORCL) is under pressure after a major analyst initiated coverage with a Sell rating, casting a shadow over the company’s cloud revenue valuation. The downturn follows Rothschild & Co Redburn’s analyst Alex Haissl starting coverage of Oracle with a “Sell” rating and a price target of $175. The analyst believes the market significantly overestimates the value of Oracle’s contracted cloud revenues.

The firm argues that Oracle’s role in single-tenant, large-scale deployments more closely resembles that of a financier than a cloud provider, leading to economics that differ from the model of cloud companies. Rothschild’s analysis suggests Oracle’s five-year cloud revenue guidance equates to $60 billion in value,…