Street Calls of the Week
Investing.com - Jefferies has reiterated its Buy rating and $360.00 price target on Oracle (NYSE:ORCL), viewing recent executive changes at the company positively. With a current market capitalization of $922.34 billion, InvestingPro data shows Oracle trading at a P/E ratio of 75.23, suggesting the stock is currently overvalued relative to its Fair Value.
The firm sees the leadership adjustments as reflecting Oracle’s position of strength as it approaches a key inflection point in its AI strategy. The company’s solid 9.67% revenue growth and "GOOD" financial health score from InvestingPro support this positive outlook.
Jefferies noted that Safra Catz delivered strong performance during her tenure as sole CEO, with Oracle stock gaining 468% since September 2019 compared to the S&P 500’s 121% rise during the same period.
The firm credited Catz with successfully steering Oracle from the cloud era into the AI era while accelerating both top-line and backlog growth.
Despite the positive outlook, Jefferies expressed caution about the reintroduction of a co-CEO structure, pointing out that Oracle underperformed the S&P during the first five years of Catz’s previous co-CEO tenure, with Oracle gaining 35% versus the S&P’s 49% increase.
In other recent news, Oracle Corporation has announced significant leadership changes, appointing Clay Magouyrk and Mike Sicilia as co-Chief Executive Officers. The current CEO, Safra Catz, will transition to Executive Vice Chair of the Board of Directors. In addition, Oracle is part of a consortium that could enable TikTok to continue its operations in the United States, according to a CBS News report. Analyst Mark Shmulik from Bernstein SocGen Group highlighted the potential benefits of Oracle’s TikTok deal, noting the company’s growing position in cloud services. This comes as Oracle recently announced $317 billion in new remaining performance obligations, potentially making it the third-largest hyperscaler. Meanwhile, Jefferies has reiterated its Buy rating on Oracle stock, maintaining a price target of $360, citing Oracle’s market share gains in the artificial intelligence sector. DA Davidson has also maintained its Neutral rating and $300 price target, pointing out the implications of OpenAI’s growth for Oracle’s business. These developments reflect the company’s strategic moves and analyst perspectives on its future trajectory.
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