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Investing.com - Bernstein SocGen Group raised its price target on Oracle (NYSE:ORCL) to $308.00 from $269.00 on Wednesday, while maintaining an Outperform rating on the stock. The stock, currently trading near its 52-week high of $260.87, has delivered an impressive 101.5% return over the past year.
The research firm cited Oracle’s ongoing cloud transition as a key factor, noting that Oracle Cloud Infrastructure (OCI) is positioned to become the fourth largest global hyperscaler with accelerating growth. The company, now valued at $713 billion, has demonstrated solid execution with revenue growth of 8.38% in the last twelve months.
Bernstein SocGen highlighted that while most of Oracle’s current revenue comes from CPU-centric workloads, a recently announced mega contract should further accelerate growth driven by artificial intelligence initiatives.
The firm expects Oracle’s revenue and operating profit growth to accelerate over the next few years, with free cash flow margins projected to rebound once growth eventually slows.
Based on these factors, Bernstein SocGen increased its adjusted price-to-forward earnings target multiple from 31x to 35x, resulting in the new $308 price target, up from the previous $269 target. The stock currently trades at a P/E ratio of 56.79, reflecting market optimism about Oracle’s growth prospects.
In other recent news, Oracle has experienced several notable developments. TD Cowen raised its price target for Oracle to $325 from $275, maintaining a Buy rating, following advancements in Oracle’s partnership with OpenAI. Similarly, BofA Securities increased its price target to $295 from $220, citing positive sentiment regarding Oracle’s role in the AI cycle, though they maintained a Neutral rating. In collaboration news, Oracle announced its support for the White House’s vision for healthcare data interoperability, committing to work with federal agencies to enhance the digital health ecosystem.
Additionally, PNC Bank has integrated its PINACLE Connect platform with Oracle Fusion Cloud ERP, allowing clients to streamline financial operations within Oracle’s system. Despite these positive strides, Moody’s revised Oracle’s outlook to negative from stable, while affirming its Baa2 senior unsecured rating. This revision reflects concerns over elevated leverage and negative cash flow as Oracle expands its AI infrastructure. These recent developments highlight Oracle’s active engagement in AI and cloud services, alongside its collaboration with government and industry partners.
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